In a previous post, I shared about the three things that investors should avoid when making investment in any REIT. But knowing what to avoid might not intuitively translate to knowing what to search for when investing in REITs.
Thus, I want to highlight four important characteristics that ideal REIT investments need to possess before we embrace them in our portfolio.
1. Ideal REITs Shouldn’t Be Overvalued
Despite having a different structure to the traditional real estate investment structure, REITs are an investment which rely on the underlying real estate’s ability to generate income. As with all real estate investments, valuation of the REIT is important.
While you can rely on the Greater Fool’s Theory to bail you out, most investors should aim not to overpay for any REIT (or any other forms of investments). You wouldn’t want to overpay when you buy your new home either. So why …