Investors Gauging How to Play It with REITs

August 21, 2012 / Elizabeth Buckley, Commercial Property Analyst

There are investments firms that build a portfolio by putting money into REITs. These are Real Estate Investment Trust funds gauged to make profits over time, according to one certified financial planner, John Diaz. His firm, Premier Advisors has $350 million in assets they manage on behalf of clients. According to Diaz, there is bottom feeding real estate planning occurring at this time.

Investors Gauging How to Play It with REITs

His firm focuses portfolios on REITs that track healthcare properties. With the older baby-boomers going into care homes and managed care, it is a lucrative investment.

One such investment is New York Consolidated Health Care REIT. It is currently up 12.2 percent. Trading is at a price-to-earnings multiple of 74.9. Dividend yield is 4.76 percent. Healthcare Realty Trust Inc. is up 30.7 percent and trading at 302 times earnings. The dividend yield is 4.9 percent. These are public companies.

Investment opportunities exist for those willing to take the chance in the property market. There are possibly lucrative places to invest in commercial real estate. Dan Puchi, Director of Business Development for Baceline Investments, a firm that purchased $149 million worth of commercial properties between 2003 and 2012. Puchi reports that holdings in businesses such as shopping malls are a favorable choice as an alternative to homes.

On a global basis, the economy is struggling through a period of slow recovery. A certain number of investors are beginning to once again show interest in the real estate market. These investors come from all over the world to invest in property in the United States. It is considered to be a safe refuge compared to the shaky economies in many overseas countries.

There is concern among experts that this trend may reinforce the situation that started the recession in the real estate market in 2008. Although construction on new residences increased, there is concern because new home sales decreased substantially.

The REITs, generate profits as dividends. Experts think they are the easiest play on the real estate market. Dividends are a stable income source and attract people who are opposed to investing in the stock market.

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