Ask Sherry: Will I ever invest in real estate investment trusts?
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Have you ever considered investing on REIT ? What is your opinion on this investment ?
I have thought about it, and I would look into it as a viable source of dividend income.
In fact, many REITs have high dividend yields, but that to me, signals a bit of risk and volatility.
7% dividend yield?
That sounds a little high (which equals risk) for something like real estate where you can’t exactly up and move your properties to another place on a whim or are dependent on your tenant mix, location, etc.
That said, to clarify: real estate is NOT a bad investment.
I think real estate can be a GOOD investment, but I find that most people when they buy houses individually and use that argument to justify over-buying what they cannot afford as a personal home, squealing: But my house is an INVESTMENT!….
I can only hope that they have done their research before just blindly saying that their place is going to be worth what they put into it.
I also am not a fan of buying properties to rent them out as an individual. There is SO MUCH to think about with rentals aside from just covering the mortgage and fees.
You have to think about finding tenants, keeping them, maintaining their place, fixing it up & cleaning when they leave, checking to see that they paid on time and not giving them too much leeway until they take you for granted…. there is more than what people think with rentals.
REITs, I think are probably the only and safest way I will invest in real estate, however indirectly, and as part of a dividend income investing strategy. I wouldn’t put the farm into a REIT but I would buy a few after doing some research.