REIT on!

Owning a property can be a real pain, especially when you are still servicing a loan. Presuming it’s rented out, then comes the pain of maintaining the property and dealing with the rent collection and such. There’s also the income reporting and tax deductibles. Seems like quite a bit of work.

But there’s an easier alternative of course. Outsource it! Let someone else manage it, and you are effectively engaging them to do it for you. Of course they take a cut, but you still get rental returns. With just one property, there’s however no economy of scale. So the overheads involved can be high.

And then we have REITs. Effectively the same thing after all, but with the property manager handling multiple properties, collecting rents, while maintaining the properties. It’s diversification.

I’m quite for REITs, particularly as they can serve to generate an income stream. It’s not without risks …

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Comments

  1. Fred says

    REITs vs Real property, there it goes again.

    Owning REIT is the same as owning high dividend stocks. The only control you have is during AGM where you have a minority say. Other than that, you have no control. What kind of ownership is that? You can’t have any say when companies issue rights, bonds, the choice of tenants etc

    Yes, real property may present lots of headache, just like raising a child. It comes lots of headache?, or you prefer being a parent only on paper?

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