A lot of people have an interest in being a real estate guru, earning passive income from rent — often heralded on social media channels by real estate investor influencers.
And why not?
Many Manitobans have seen their home values rise significantly in the last decade or more. Plus, real estate’s one of the few investments individuals can easily get their heads around.
Investing in real estate can be less of a challenge if you do it through diversified portfolios of dozens of properties or real estate investment trusts (REITs). (Phil Hossack / Free Press files)
It’s straightforward: own it, rent it, collect the rent, and its value typically rises over time.
Beyond homeownership, investing in real estate can be challenging — at least if you’re trying to buy assets on your own. You probably need to borrow money — a lot of it — and then you have to manage the assets. Although potentially worth the effort, it’s a recipe for headaches, too.
A much simpler way to invest, however, is through REITs (real estate investment trusts) — which are essentially diversified portfolios of dozens of properties.
“The pros of REITs are they’re an affordable means to invest without buying and managing properties of your own,” says Clay Jarvis, real estate expert with NerdWallet Canada.
REIT investors earn money through appreciation of REIT shares — as their underlying properties grow in value — and from dividends from the rents the REIT managers collect — which are often more lucrative and tax-efficient than interest income from bonds and GICs.
“And it’s generally much easier to sell REIT shares on the stock market than it is to sell an actual property,” he adds.
What’s more, today is likely as good a time as any to own REITs.
That’s the assessment
The post A different, EASIER way to own real estate – Winnipeg Free Press first appeared on Insie Mesenza.