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Old 01-18-2011, 11:30 PM
 
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For this example, use a company like the one below that own/operate shopping centers:

NYSE, New York Stock Exchange > Listings > Listings Directory

1. Since by law, 90% of earnings need to be given back to shareholders, why are most of these REIT I am looking at only offering 4-5% dividends? Is this simply a result of the bad real estate market/stores unable to stay open (and pay rent)?

2. do you receive dividends monthly, quarterly, yearly, or does it vary depending on which company it is?

3. What would be a typical dividend for a stable, financially sound REIT of this type, during a time when real estate is flat or slightly increasing?

4. Hypothetically, If you had $250,000 and are looking to invest it with the intentions of leaving it alone and generating income, would you be better off spreading it over several REITs, or buying a second house as a rental?


Thanks. I am very new to this, but intrigued.

Last edited by GiantRutgersfan; 01-19-2011 at 12:00 AM..
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Old 01-19-2011, 02:32 AM
 
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the 4-5% is about all thats left over after expenses on some. i use an un-traded reit from apple hospitality. i get 7% ,its paid monthly and at the end of 7 years its sold off and the profits split if any.

i would never consider a 2nd home instead .. tenant issues, expenses and aggrevation would make it something i dont want. we are going to be selling ours in the spring. just not worth it...

.
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Old 01-19-2011, 02:26 PM
 
Location: The South
767 posts, read 2,282,015 times
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Quote:
Originally Posted by GiantRutgersfan View Post
For this example, use a company like the one below that own/operate shopping centers:

NYSE, New York Stock Exchange > Listings > Listings Directory

1. Since by law, 90% of earnings need to be given back to shareholders, why are most of these REIT I am looking at only offering 4-5% dividends? Is this simply a result of the bad real estate market/stores unable to stay open (and pay rent)?

2. do you receive dividends monthly, quarterly, yearly, or does it vary depending on which company it is?

3. What would be a typical dividend for a stable, financially sound REIT of this type, during a time when real estate is flat or slightly increasing?

4. Hypothetically, If you had $250,000 and are looking to invest it with the intentions of leaving it alone and generating income, would you be better off spreading it over several REITs, or buying a second house as a rental?


Thanks. I am very new to this, but intrigued.
This is a very good site for REIT Info.
QuantumOnline.com Home Page
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Old 01-19-2011, 03:24 PM
 
4,284 posts, read 10,721,031 times
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Quote:
Originally Posted by mathjak107 View Post
the 4-5% is about all thats left over after expenses on some. i use an un-traded reit from apple hospitality. i get 7% ,its paid monthly and at the end of 7 years its sold off and the profits split if any.

i would never consider a 2nd home instead .. tenant issues, expenses and aggrevation would make it something i dont want. we are going to be selling ours in the spring. just not worth it...

.

Interesting.

Would you say getting involved with a REIT would be the best way to invest, with the goal being to get a "5th paycheck" every month?
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Old 01-25-2011, 05:03 AM
 
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all the above questions vary on investor.

1. Could be for many reasons, (you have to look at the financial statements). The single largest expense is going to be interest since most REITs use lots of leverage to buy up properties. If the interest is high it could hurt the dividend.

2. Varies based on company but most pay quarterly.

3. 5% but don't focus entirely on yield you want to buy stable companies that have a good track record of increasing the dividend yield.

4. It varies, both have their pros and cons. For REITs you can buy into several different types of real estate and diversify which might protect you from recessions and what not. Another pro is that you can quickly sell the shares if you need cash. The con of the reits is that it has potentially low yield. For the second home thats your only investment so you aren't diversified. If you can't find a tenant, you are screwed. The pro to the second home is that potentially long term stable cash flow and higher yield if you know how to manage the property right. The cons are: difficult to sell, have to actively manage it (could be a hassle).

Quote:
Would you say getting involved with a REIT would be the best way to invest, with the goal being to get a "5th paycheck" every month?
Its a wise idea IMO. For my income portfolio here is how I structure it:

40% MLPs (do a google search for this if you don't know what it is)
40% REITs
20% generic high dividend companies (usually telecom company but can be any company)

I buy 10 stocks in total: 4 MLPs, 4 REITs, 2 generic. Rebalance annually if necessary.

Last edited by killer2021; 01-25-2011 at 05:12 AM..
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Old 01-25-2011, 06:45 AM
 
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Default Reits are still a huge risk...

I can imagine there are a handful of REITs that were not caught in a the massive turmoil that is effecting basically every category of real estate, but the fact is volatility is still a major concern.

I have experience owning rental too, and despite lots of people facing foreclosure their really are not as many folks are looking to rent as ought to be...

I really don't know enough about your situation, but most folks prefer growth to income over the long haul.
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Old 01-25-2011, 07:13 PM
 
Location: Paranoid State
13,044 posts, read 13,785,573 times
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Quote:
Originally Posted by mathjak107 View Post
the 4-5% is about all thats left over after expenses on some...
.

I wonder if part of the reason is that senior managers of the management companies pay themselves outsized compensation...
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Old 01-26-2011, 02:09 AM
 
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Timber REITs are another type of REIT to consider. These are companies that own large tracts of woodland. They make revenue by selling wood and also higher-value land for recreational and home development. Two that I track are Weyerhaeuser (WY) and Plum Creek Timber (PCL).

Hopefully someday soon some company will come out with a agricultural REIT, that owns and leases out farmland. There is one such company in Canada, but they do not allow Americans to invest in it.
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Old 01-26-2011, 02:11 AM
 
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Quote:
Originally Posted by SportyandMisty View Post
I wonder if part of the reason is that senior managers of the management companies pay themselves outsized compensation...
Sadly, that is the case of many corporations. It is not a feature of REITs only.
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Old 01-26-2011, 02:57 AM
 
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i prefer my un-traded reits to publicly traded ones. i used to own both but eventually sold off ICF my public one.

publicly traded reits are stocks first and a play on real estate 2nd. as such they can be wildly volatile. i had ICF fluctuate as much as 12% in one afternoon. they are subject to greed , perception and fear and my never trade at what the underlying assets are actually worth. no way did the properties actually change value by 12% in one afternoon.

the un-traded reit is as close to actually owning brick and mortar as you can get. the monthly payment is not based on perception but on actual earnings like your own business would . i use apple hospitality suites which only owns extended stay hotels and gets marriott or hilton to run them and put their name on it.

at the end of 7 years they are sold and profits distributed.

those days when the markets swing 400 points your un-traded reit doesnt budge. so far this is the third one im in. the dividend is around 7% a year, the first one i had was sold a few years ago and we averaged over 17% a year over 7 years when all was said and done.

the way they work is the reit is opened, a billion dollars is raised and then no new people can come in. the properties are bought and at the end of around 7 years if markets are favorable they are sold off and the reit terminated. if you want to roll it over into the next forming reit you can.


the drawbacks?

there are fees to get in around 6% or so. but then again i dont know any real estate i can buy thats real brick and mortar without closing costs.

they arent all that transparent as to where the profits may be going

some have very high fee structures so watch out what you buy.

they are not very liquid

i think of it like a reit is a stock and an untraded reit is more like a bond on steroids. hopefully if inflation creeps up unlike a bond which drops real estate rises.... when i owned both types of reits using my bucket system the un-traded when in my bond bucket, the publicly traded reit went in my stock bucket. the two behave very differently.

you even get a depreciation allowance on the untraded reit just as if you owned real property.

Last edited by mathjak107; 01-26-2011 at 03:14 AM..
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