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If none of this sounds appealing to you, consider investing in a real estate investment trust (REIT). These are companies that purchase office buildings, hotels

by pdog 10y ago

If none of this sounds appealing to you, consider investing in a real estate investment trust (REIT). These are companies that purchase office buildings, hotels, and other properties and distribute their rental income as dividends. For example, Vanguard has a diversified REIT ETF with a minuscule expense ratio and a healthy 4% yield: https://personal.vanguard.com/us/funds/snapshot?FundIntExt=INT&FundId=0986 https://personal.vanguard.com/us/funds/snapshot?FundIntExt=I...

adventurer 10y ago
Real estate looks as if it is way over-priced at this point. If you don't want the tax benefits of owning a rental, why not index fund your money, then you would be almost double the 4% long-term, either way.
- eldavido 10y ago
  Which market? I agree a lot of hot metros are looking expensive (SF, Seattle). Things are cheaper in places farther from growth and money, e.g. rural Indiana. I'm not sure whether they're better deals on balance, but quite different.
  - sitkack 10y ago
    Just what those people living in those places need. More investors making money off their condition. The rent is already too damn high.
    - mcguire 10y ago
      Watch how high it gets when investors pull out of the market.
    - nradov 10y ago
      REIT investors aren't the cause of high rents. Actually the opposite. Every dollar they put in lowers the cost of capital for property developers and encourages the construction of new housing units.
  - maxsilver 10y ago
    > Which market? Every market. Literally every market.
- deleted 10y ago
  [deleted]
- brobinson 10y ago
  Real estate value (as represented by REITs) has been going up despite increases in the Fed Funds rate. This implies a discount-to-book value. I think we still have a bit to go.
- blibble 10y ago
  there's no reason not to have it as part of your portfolio probably a small part, to be fair, especially if you own your own home
  - pdog 10y ago
    If you own a total market index fund, REITs are already a small part of your portfolio.
fiatjaf 10y ago
Bad idea.
- loeg 10y ago
  Because?
brobinson 10y ago
REITs are great. iShares has REM which yields almost a 10% dividend annually and represents ownership in 36 different REITs: https://www.ishares.com/us/products/239543/ https://www.ishares.com/us/products/239543/ (Disclaimer: I don't own REM, but I own MORL which is the 2x leveraged equivalent and has monthly dividends)
- deleted 10y ago
  [deleted]
- pscsbs 10y ago
  Is MORL part of a buy and hold strategy? Do you lose out to any daily rebalancing or do the dividends offset that?
  - brobinson 10y ago
    It only represents a very small part of my portfolio, and I've been DRIPing it for a while. If you were thinking of buying in before the large dividends (quarterly), don't bother because the price will change on the ex-dividend date to reflect the dividend being recorded. Also, the rebalancing is monthly.

by pdog 10y ago

adventurer 10y ago

Real estate looks as if it is way over-priced at this point. If you don't want the tax benefits of owning a rental, why not index fund your money, then you would be almost double the 4% long-term, either way.

eldavido 10y ago
Which market? I agree a lot of hot metros are looking expensive (SF, Seattle). Things are cheaper in places farther from growth and money, e.g. rural Indiana. I'm not sure whether they're better deals on balance, but quite different.
- sitkack 10y ago
  Just what those people living in those places need. More investors making money off their condition. The rent is already too damn high.
  - mcguire 10y ago
    Watch how high it gets when investors pull out of the market.
  - nradov 10y ago
    REIT investors aren't the cause of high rents. Actually the opposite. Every dollar they put in lowers the cost of capital for property developers and encourages the construction of new housing units.
- maxsilver 10y ago
  > Which market? Every market. Literally every market.
deleted 10y ago
[deleted]
brobinson 10y ago
Real estate value (as represented by REITs) has been going up despite increases in the Fed Funds rate. This implies a discount-to-book value. I think we still have a bit to go.
blibble 10y ago
there's no reason not to have it as part of your portfolio probably a small part, to be fair, especially if you own your own home
- pdog 10y ago
  If you own a total market index fund, REITs are already a small part of your portfolio.

fiatjaf 10y ago

Bad idea.

loeg 10y ago
Because?

brobinson 10y ago

REITs are great. iShares has REM which yields almost a 10% dividend annually and represents ownership in 36 different REITs: https://www.ishares.com/us/products/239543/ https://www.ishares.com/us/products/239543/ (Disclaimer: I don't own REM, but I own MORL which is the 2x leveraged equivalent and has monthly dividends)

deleted 10y ago
[deleted]
pscsbs 10y ago
Is MORL part of a buy and hold strategy? Do you lose out to any daily rebalancing or do the dividends offset that?
- brobinson 10y ago
  It only represents a very small part of my portfolio, and I've been DRIPing it for a while. If you were thinking of buying in before the large dividends (quarterly), don't bother because the price will change on the ex-dividend date to reflect the dividend being recorded. Also, the rebalancing is monthly.