Looking to get into REITs, any tips?

Question

So I’m new to investing, and do not have a ton of money saved up to go out and buy up some rentals which was my original goal. Considering getting into REITs to have some money flow to use at some point towards other RE investing goals.

Any tips, pointers, pros cons?

Greg Dickerson · Answer

REITS have performed well over the last 10 years but several are in serious trouble right now especially office and retail so you need to be careful and do your homework. Housing, mobile home parks, self storage and industrial are good bets moving forward but you definitely want to steer clear of office and retail REITS

Whitney Hutten · Answer

@Brennan Thomas I have limited experience with REITs.  I've invested in VNQ and appreciated the liquidity.  Over 5 years holding it, it didn't do anything for me, especially compared to my rentals and syndications, so I sold and moved on.  A family member was invested directly in two REITs outside the markets.  Both tanked (one was residential and one commercial), and they were so illiquid that when it came time to access their money in retirement, they couldn't get to it and had to sell at a dutch action (taking a huge capital loss).

Real estate carries enough of its own risk that I'd want to have control over the asset or the operator I invested with.

Ronald Rohde · Answer

Fair observations, I find a lot of people don't know the right partners as well. To execute a flip may require 20-30 vendors!

I think REIT performance is lower than doing your own as well.

Storm S. · Answer

@Brennan Thomas I’m going to disagree with the post above. REIT’s outperform private real estate and the S&P 500 over the long run. So unless your buying your primary residence, flipping properties or doing BRRRR I would invest your money into REIT’s. Over the long run REIT’s return 11-12% annually much higher than the 4% mentioned above. Personally I’m all in on REIT’s and was buying up a bunch of them throughout April and as of today I’m up over 15% and hope to be up 50-100% by this time next year. A good resource is Reit.com they have a lot of information about REIT’s to help get you started.

Collin Placke · Answer

I consider investing in a REIT more akin to investing in the stock market, and there are better funds/ETFs than REITs that deliver higher average returns. My advice would be to stop looking at "not having a ton of money saved up" as a barrier to entry. There is plenty of advice/strategies here on BP that can get you started in real estate investing with low or no money down. Your problem isn't that you don't have enough money saved to get started, you just don't have enough tools in your tool belt to have the confidence to get started with little or no money.

I say take the money you would have thrown into a REIT to earn 4% per year and join a reputable paid mentorship program... someone who can give you the tools, confidence, and motivation to get started and be a true real estate investor. I'm not a mentor or coach, but you can DM me for referrals.

Henry Lazerow · Answer

I invest in both reits and physical property feel free to PM me. Reits are more volitile then market so you need to mentally be ok upfront with even a 50% drawdown and instead use that as an opportunity to add to positions.

Some solid dividend stocks (not just reits). Its good to diversify.

BIP

O

AQN

STAG

NHI (great price right now)

MAIN (great price right now) I loaded up near the bottom and already up 30%. This normally trades at a huge premium to NAV

Looking to get into REITs, any tips?

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