Saturday, January 17, 2015

REIT - Real Estate Investment Trust's

In my search and readings about finance and financial freedom over the years, there is almost always a section where it says you should own property for passive rental income as a part of your portfolio.

This means having enough money to purchase investment property, maintenance, insurance, taxes and always trying to keep that house/property leased. This maybe a headache people just don't want to deal with, although the headache could very well be rewarding in the long run.








There is an alternative to owning property and rental income without the headaches. This alternative pays great dividends and lots of growth. I am talking about REIT's, Real Estate Investment Trusts, that pay you to own shares in companies that own rental property ect, weather it be commercial or residential.
Now if you do a search you may feel a little over whelmed with the vast amounts of options out there for investing in REIT's. After digging around I found an ETF that suits me quit well, VNQ - Vanguard REIT Etf. This ETF holds quite the portfolio of amazing REIT's all rolled up into one ETF. Quick snap shot of its holdings.

REIT ETF
as of 12/31/2014
MSCI US REIT Index
as of 12/31/2014
Diversified REITs9.80%9.80%
Health Care REITs13.90%13.90%
Hotel & Resort REITs8.10%8.00%
Industrial REITs4.50%4.50%
Office REITs13.30%13.30%
Residential REITs16.20%16.20%
Retail REITs25.50%25.50%
Specialized REITs8.70%8.70%
Month-end ten largest holdings
(37.7% of total net assets) as of 12/31/2014 
1Simon Property Group Inc.
2Public Storage
3Equity Residential
4Health Care REIT Inc.
5Prologis Inc.
6AvalonBay Communities Inc.
7Ventas Inc.
8HCP Inc.
9Vornado Realty Trust
10Boston Properties Inc.
VNQ expense ratio of .10%

Current trading price as of 1-17-15 : $87.34

Year Chart











This baby has been on fire as you can, while also paying a nice 3.60% annual distribution yield. 

I do not hold any position in VNQ yet, just a little to high in price for me and will be waiting for a pullback to start buying into it. 

So it would be best to look into REIT's more and may be a great add to your portfolio. 

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