Investing in the real estate market is not nearly as attractive to some as it used to be, especially for Canadians who watched the U.S. market meltdown in 2008 and 2009. The good news is Real Estate Investment Trusts (REITs) in Canada are performing far better than their counterparts in the States.  Investors that have resources available have an opportunity to get into the home mortgage and real estate area without having to actively invest in individual properties themselves.

REITs currently do not play a large role in Canada’s capital market, unlike stocks and bonds.   Many small investors simply do not realize that this investment opportunity exists and is expected to continue its solid performance well into 2010 and maybe even beyond.  There is also legislation pending that could see this market share grow in 2011.

What exactly is an REIT?  They are best compared to a mutual fund that concentrates on real estate portfolios. They sometimes center on specific property types like lodging, retail or offices. Investors purchase and hold units and then share in both profits and losses based on the number of units owned.  The benefit of not being responsible for overseeing individual properties as a landlord has obvious benefits.

These investment trusts have been a solid investment in the past year. They have seen growth in the double digits. For the small investor they are a great to stick a toe into the real estate waters without having to deal with the hassles of individual home mortgages.

Expectations are that REITs will continue to show positive growth, perhaps even in the low double digits for a couple of years. There is also a belief that more money will flow into these trusts during 2010 because of investors looking to divest in income trusts to avoid the expected taxing of these trusts in 2011. Real estate investment opportunities where someone else takes care of home mortgages, loans and upkeep? Yes, it is possible with an REIT.

Related articles by Zemanta
Reblog this post [with Zemanta]


Related Blogs