What are REITs or Real Estate Investment Trusts?
They are basically stocks that invest into real estate directly. They hold many different types of real estate like apartment buildings, shopping malls, office towers. Reits are highly liquidable and offer high yields but are prone to rising interest rates and real estate markets as well as occupancy problems. A good high quality Reit often will have long term leases with business such as banks or large chains like Walmart that provide very steady income.
First off this is a risky move and not recommended to any sane investor. Yes I am still crazy. Even worse I bought these all on Margin at 3% interest.
After much reading and analyzing certain REIT stocks I decided to jump in. REIT levels are still off their 2013 high and the trend is showing a good upswing. Interest rates are destined to be low for the next couple years as well. I plan on holding this for at least a year and see how it goes but hey you never know. Hopefully I will get some capital appreciation as well as some sky high yield with this play.
|BTB-UN.TO||BTB REIT UNITS||4.90||6.90||8.52%||-||.42|
|HR-UN.TO||H&R Real Estate Investment Trust||23.23||19.69||5.79%||1.14||1.35|
|REI-UN.TO||Riocan Real Estate Investment Trust||27.14||11.65||5.18%||2.31||1.41|
|AX-UN.TO||Artis Real Estate Investment Trust||16.02||19.30||6.75%||1.02||1.08|
|CUF-UN.TO||Cominar Real Estate Investment Trust||19.58||9.89||7.50%||1.94||1.47|
|DRG-UN.TO||DREAM GLOBAL REIT||9.53||-||8.39%||-||.80|
|RMM-UN.TO||Retrocom Real Estate Investment Trust||4.48||-||10.02%||0.37||.45|
|D-UN.TO||Dundee Real Estate Investment Trust||29.06||-||7.70%||3.24||2.24|
Average Yield 7.57%
Forward Yearly Dividends $11,562
Monthly Dividends $963
Monthly Dividends after margin cost $588
As you can see yield is quite high. Some are higher risk than others with some smaller Reits like RMM.UN $336.4 Million market cap ranging up to the largest in Canada with REI.UN with 8.3 Billion market cap. All these companies have a good history of payout as many have over 20 years in consistent monthly payouts.
So crunching some numbers these buys of $152,669 of Reits will bring in a 7.57% yield at $11,562 in forward dividends or $963.50 paid monthly but since margin interest is at 3% that I borrowed at I have $149,894 debt which will cost me $4496 a year or $374 a month. This should hypothetically leave me $7065 a year or $588.75 a month after margin interest costs.
I will continue to pay down my $152,669 at 3% margin rate account with the payout proceeds every month to increase the difference I take home.
I will update my holdings but I will keep this batch of Reit stocks away from my regular account as so it can be monitored separate.
So come join me and watch me lose all my money with these methods or watch me grind forward to a billion!
Disclaimer: Do not trade like me and lose all your money and cry to me after. I am no professional, I am just a regular guy that can hardly spell . Do your own research and dont follow anybody blindly on the internet because it a dangerous place and you might get hurt. Plus I dont take well to cry babies. Take your losses on the chin and man up and dont blame your own mistakes on others.