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Investing in a REIT versus actual property

  • 10-10-2014 7:38pm
    #1
    MicktheMan
    Registered Users, Registered Users 2 Posts: 2,880 ✭✭✭


    I would appreciate a simple explanation from those in the know on the pro's & con's of investing in a REIT versus in actual real investment properties, issues of being a landlord aside. So yield, tax, risk, ease of entry / exit etc in the Irish context. Thanks


Comments

  • #2
    quadrifoglio verde
    Registered Users, Registered Users 2 Posts: 3,670 ✭✭✭quadrifoglio verde


    The biggest advantages I can see are ease of entry/exit as they are public ally traded (well some are), you don't have to deal with tenants or the prtb, the tax advantages (rent is most likely taxable at the highest rent, minis mortgage interest and some expenses).
    You don't risk having nom paying tenants.

    Disadvantages that I can see is them choosing the wrong properties/overpaying, or the reit going bang.


  • #3
    ffactj
    Registered Users, Registered Users 2 Posts: 102 ✭✭ffactj


    Any links on the performance of reits?


  • #4
    MouseTail
    Registered Users, Registered Users 2 Posts: 1,663 ✭✭✭MouseTail


    They were only introduced in the last budget, so are new to Ireland.
    http://www.independent.ie/business/personal-finance/reits-are-the-new-kid-in-town-so-tread-carefully-30409211.html


  • #5
    kennyb3
    Registered Users, Registered Users 2 Posts: 6,724 ✭✭✭kennyb3


    MicktheMan wrote: »
    I would appreciate a simple explanation from those in the know on the pro's & con's of investing in a REIT versus in actual real investment properties, issues of being a landlord aside. So yield, tax, risk, ease of entry / exit etc in the Irish context. Thanks

    Worth a read

    http://www.thepropertypin.com/viewtopic.php?f=4&t=61436&p=768125&hilit=REIT#p768125

    Wouldn't touch them. The graph in 3rd post on pg 11 worth noting. And the fact many trading at a premium to underlying assets a concern.


  • #6
    tralalala
    Registered Users, Registered Users 2 Posts: 24 ✭tralalala


    REITs will move with the market so up and down so I don't see how the chart is a problem

    before buying in a REIT you have to know it well, assets, debt, strategy, etc.

    You cannot buy a REIT with debt. I would not recommend REITs unless you are an experienced investor


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  • #7
    tralalala
    Registered Users, Registered Users 2 Posts: 24 ✭tralalala


    REITs will move with the market so up and down so I don't see how the chart is a problem

    before buying in a REIT you have to know it well, assets, debt, strategy, etc.

    You cannot buy a REIT with a loan or a mortgage. I would not recommend REITs unless you are an experienced investor


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