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Investment - traditional property purchase or REIT?

  • 31-10-2019 1:46pm
    #1
    Mad_maxx
    Registered Users Posts: 13,505 ✭✭✭✭


    Might be coming into some money soon, wondering whether to just buy the ires reit or buy a one bed apartment in Dublin city, reit pays 3%

    I do have reservations about reits, perhaps management and the board of directors reward themselves handsomely at the expense of share holders?


Comments

  • #2
    The Student
    Registered Users Posts: 1,238 ✭✭✭The Student


    It takes a certain type of person to be a landlord. Only you will know if you are that type of person. It is not easy money as some would have you believe. Getting phine calls at anytime of day or night.

    For what its worth I would go for a two bed quicker than a one bed. Two beds are easier to both sell and rent.


  • #3
    Browney7
    Registered Users Posts: 3,098 ✭✭✭Browney7


    Do you plan on borrowing to invest in a property or outright purchase? This will influence your ROI when comparing the returns available on either approach. You'd hardly borrow (or indeed be given the money) to double down on a REIT investment? Tax and PRSI etc would be payable on dividends received from the REIT no different to rent on holding property directly.

    What draws you to investing a large lump sum in one concentrated investment or sector in a small, open economy on Europe's periphery? Do you believe Irish real estate is undervalued or are you familiar with property investment?


  • #4
    Mad_maxx
    Registered Users Posts: 13,505 ✭✭✭✭Mad_maxx


    Browney7 wrote: »
    Do you plan on borrowing to invest in a property or outright purchase? This will influence your ROI when comparing the returns available on either approach. You'd hardly borrow (or indeed be given the money) to double down on a REIT investment? Tax and PRSI etc would be payable on dividends received from the REIT no different to rent on holding property directly.

    What draws you to investing a large lump sum in one concentrated investment or sector in a small, open economy on Europe's periphery? Do you believe Irish real estate is undervalued or are you familiar with property investment?

    Plenty of text book speak there


  • #5
    DubCount
    Registered Users Posts: 1,064 ✭✭✭DubCount


    The REIT option has certain advantages to consider.

    Diversification - your investment is more broadly based so you get less impact of bad tenants, large ticket maintenance etc.

    Liquidity - if you need to convert some of your investment, you can sell a portion of your shares, in stead of having to sell an entire property which is expensive and time consuming.

    Administration - REIT shares don't involve registration with RTB, LPT, formal notifications to tenants for rent increases, HAP paperwork, phone calls re broken plumbing at 2AM etc.

    For large investments, its always worthwhile visiting a wealth management consultant to ensure your investments meet your lifestyle and objectives. Property may not be the best investment for you at all.


  • #6
    Browney7
    Registered Users Posts: 3,098 ✭✭✭Browney7


    Mad_maxx wrote: »
    Plenty of text book speak there

    Do tell us what advice you want to hear so?


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  • #7
    Mad_maxx
    Registered Users Posts: 13,505 ✭✭✭✭Mad_maxx


    Browney7 wrote: »
    Do tell us what advice you want to hear so?

    Opinions specifically about reits v straight property purchase


  • #8
    MicktheMan
    Registered Users Posts: 2,823 ✭✭✭MicktheMan


    Do neither, the risk v reward is crazy


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