You don’t have to travel to invest in property abroad. You can simply buy a REIT. Short for Real Estate Investment Trust, they are far superior to holding a single investment condominium. Here’s how they make you money.

 

What are REITs?

AREIT is a company that owns real estate. It trades on a stock exchange just like other corporations. You simply place a buy order through your broker of choice. The income these properties generate for the company is paid out as dividends to the shareholders. By law this payout ratio must be 90% of profits. It’s therefore akin to buying an apartment or house and renting it out. Buying a REIT makes you a co-owner of the underlying properties held in its portfolio.

The most common type of REITs are:
TO READ ON SUBSCRIBE AND BECOME A PATREON.

  • MushroomApe

    great blog post, lots of value

    • Harald Baldr

      Thanks, I try my best 😉

  • Jack

    Great article, thanks.

    • Harald Baldr

      No problem

  • Chris Popov

    Yeah but REIT values can go down to 0 in the worst case scenario, while physical property will loose 40% max

    • Harald Baldr

      Anything can go to zero. The building your apartment is in could go down in a fire or be hit by a plane. A large diversified non-mortgage REIT going under is a rare event.

    • MushroomApe

      is there s REIT for the land? and not the property on it?

      • Harald Baldr

        I’m not aware of any REITs that hold nothing but land

  • Lucas Marosca

    Thanks for the article.

    A correction about your example in Brasil. CYRE3 (Cyrela Brazil Realty) is not a REIT but a company that develops residential real state.
    All REITs listed in Brazil have a ticker ending in 11 (for example BRCR11 the biggest REIT in the market http://www.bcfund.com.br)

    • Harald Baldr

      Are you sure? I just want to make sure before I edit the article.

      From Bloomberg:

      “Cyrela Brazil Realty S.A. Empreendimentos e Participacoes develops, rents, manages and sells residential and commercial real estate properties. The Company’s real estate portfolio includes shopping centers, office and apartment buildings, hotels and land”

      http://www.bloomberg.com/quote/CYRE3:BZ

  • Sean D

    The problem with REITs imo is an inability to buy undermarket and a lack of value add potential. I know real estate investors who make a very nice living hunting for motivated sellers, buying at big discounts, doing minor fixes/rent adjustments and renting out for an increased yield plus appreciation, principle paydown and tax deductions. Of course this requires some management but boy is the effort worth it.

    • Harald Baldr

      That is true Sean but it also requires more time, effort and at least visiting the location of your purchase a few times.

      Which countries does your friends operate in? Do they prefer western or emerging markets?

      • Sean D

        Hey Harold, all of my RE contacts are local investors in Southern California. So their methods definitely are NOT digital nomad friendly 🙂 I’ve heard that going from residential to commercial can change that with a good property management company, but don’t know anyone who made that transition (my friends tend to self manage or hire an area manager).

        No doubt that non-REIT REI is a very local type of business

Password Reset
Please enter your e-mail address. You will receive a new password via e-mail.