Tenants put certain pressures on landlords that often make them contemplate selling their properties. Late payments, maintenance, utility prices are just part of a growing list of concerns. REITs provide allow you to invest in real estate properties without the added risk.
REITs in a Nutshell
REITs are trusts that own and proficiently manage real estate properties. They entitle you to the benefits of owning properties such as potential rises in the value of holdings. You don’t even have to lift a finger.
They are a competitive investment option since the dividends come in regular or monthly increments. Investing in REITs can also help you diversify your portfolio in the real estate sector. You can hold REITs in more sub-sectors when compared to owning properties. What’s more, it comes at a significantly lower cost and risk.
Examples of REITs
The list of REITs in Canada is quite long, so we’ll limit it to a few examples in prime sectors:
1. Inovalis REIT (TSX: INO.UN)
2. Agellan Commercial REIT (TSX: ACR.UN)
1. REIT for Choice Properties (TSX: CHP)
2. REIT for Slate Retail (TSX)
2. Allied Properties
3. Office REIT
1. REIT for Boardwalk, such as (TSX: BEI.UN)
2. REIT for Killam Apartment (TSX: KMP.UN)
Real Estate Healthcare
1. Residences REIT: Chartwell Retirement (TSX: CSH.UN)
2. REIT for NorthWest Healthcare Assets (TSX: NWH.UN)
Advantages of REITs
Aside from repair costs, you also don’t have to deal with insurance payments, mortgages and taxes. The company deals with such issues. Investors are also freed from having to collect rent from the properties’ occupants. The trust receives all rent on your behalf and hands you a percentage of the proceeds.
REITs also allow you to have a more diverse portfolio. As you can see from the examples, you can even invest in sectors that require a specific specialization that you may lack.