Investing in REITs + 5 REIT Stocks (O, ARE, AP.UN, SRU.UN, Vonovia)
ฝัง
- เผยแพร่เมื่อ 19 มิ.ย. 2024
- Investing in REIT stocks looks straightforward like investing in Real Estate, but unfortunately it is a different game. Investing in REITs is about interest rates, debt and more.
0:00 Investing in REITs
0:44 REITs Situation
4:12 5 FACTORS FOR REITs
12:31 My CONCLUSION
15:50 BUFFETT and REITs
19:50 Realty Income O
22:53 ARE
24:10 AP.UN
25:27 SRU.UN
28:26 Vonovia
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So to summarize, it can go up, it can go down but it can also stay flat. Thanks that was very helpful Sven.
that is what I do, I am looking for things that can go up, but hard to go down
Well done for figuring out how the stock market works 😂
excuse my sarcasm
@@lonnykid2997if you have a distribution of future scenarios that indicate low chance of loss and high chance of gain, you buy.
If you have a situation where there is equal chance of loss or gain, you don't do anything
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Allied properties is a tricky one. It has AAA assets in city centres with big redevelopment potential, a great management with a solid track record. I'm from Montreal and know their local assets well, their Toronto properties are also golden. So if they can weather the storm (which I believe they will) this is a good longterm holding
Sven, somewhere in this video you say it might be better to invest in real estate myself, rather than invest in a REIT. But if I buy a home with a downpayment of 10%, I am leveraged for 90%, which is worse than the leverage of most REITs. And if I buy real estate for investment, I must improve and manage the building myself, or outsource it to an external company, which will cost either time, or money. So you worry about the leverage of the REITs you discuss, but you don't worry about a 90% leverage if I buy a home or an investment property. This seems contradictory to me.
as a former real estate investor, it's been my experience that you can make much more money (i.e. higher rates of return, 'higher reward' as Sven calls it) investing in individual properties than in bundles of properties (i.e. REITs). I'm talking 20%, 30%, 50%+ (annualized) vs the 5-10% you can make on REITs, etc. this is primarily due to the higher risk premium (e.g. lack of diversification) of investing in individual properties. But if you have a great agent you trust, a contractor you don't think will cheat you too much (they all cheat haha), and the managerial skills and abilities to make it happen, you can far exceed the dividend and cap apprec returns of REITs, etc. That said I'm not buying real estate now (given the macro conditions Sven laid out in his video). In fact I just sold my last property last month. It's the time to sell, not buy, RE imho. When the crash comes, I'll go back to RE investing :)
yes, with a REIT you have a manager that cares about his money, not yours, with your own property you know what you are doing! The downpayment depends on you, the costs, the price and all depends on you:-)
@@Value-Investing well said! you are an inspiration Sven! :-)
He doesn't say buy a house yourself for 10% equity, he's saying buy a house yourself if the price is good and you can increase the value by renovating for example. Exactly how he did with the house he bought in Netherlands.
@@mihaidaniel8373 exactly! he also mentioned investing in RE 'for your grandkids'- so, a longer than usual (more than 10yrs) time horizon... the price you buy at now won't matter much in 2050, for example... the price will most likely go way up, almost by default, due to inflation, other macro factors, etc
Fair video with a grounded assessment. I bought some early in the pandemic. EU REIT bloodbath is also in full swing now. Bought some of that last year & still positive. I just bought to track the sector and will increase when it drops more. I just buy for the yield and to hold for the rest of my life (which are also Buffett mantra's). Set it, forget it & use the time useful elsewhere (taking care of my parents, raising a son, growing my own food, other skill acquisition). Lower my own inflation rate. I will still like this sector because there are real assets, with an understandable valuation logic (interest vs asset value). Yes, debts will be a real issue, but at least they can pass inflation on, whilst several sectors can't do that.
Sven is a drop of wisdom in an ocean of greed and speculation
:-)
Hey Sven, thank you as always.
If REIT is not ripe yet for the catching, what would you say are some high yield (4-5%) options for the income oriented investors in this market?
MLP are tricky for Europeans because of tax reasons. What does it leave on the table?
Thanks for considering
German bonds 3%, US treasuries 5%
Thanks Mr. Sven for the video. I have some exposure to REITS and only time will tell how they developed. Greetings from Bogotá, Colombia.
Thanks for sharing!
Many thanks Sven!! 🙌
great video sven. one of my favorites
Started a position in 0 @ 46. we will see.
thanks for sharing!
wonderful learning experience
Thank you! Cheers!
Good video thx sven..
till half the video i thought it was classic sven weekend worrier, especially when saying "the return has already been made" whitout any reasoning behind it. however in the second half it was everything was more clear and made sense, especially when noting buffet letters, that's the way to do it, waiting for extremely no brainer opportunity the time they come in a decade, keep it up
thanks!
Excellent content, thank you! There's an additional, more nuanced reason why REITs focused on residential properties face challenges in a high-interest and high-inflation environment: escalating administrative and maintenance expenses. These costs are surging due to increased prices for goods, services, and labor. Compounding this issue, regulatory caps often prevent REITs from raising rents swiftly enough to offset inflation-driven cost increases. Moreover, social pressures could lead to further constraints, such as rent freezes or other regulatory measures, potentially eroding any remaining profits, assuming they still exist.
excellent points!
I have some SRU.UN as well and quite like it. I noticed the 'ok' debt but it was the development plans that caught my eye. I bought it for the dividend and long term growth, not looking for anything in the short term...
The argument that anything can happen going forward is not an argument.
that is my opinion :-)
@@Value-Investing using that “argument “ you would not invest at all because “anything could happen”.
@@toddsmith4280you invest in something where anything can happen and you'll still probably make money.
Thank you so much!
Thank you!
Thanks Dr Carlin, always enjoy your videos, especially on those longer and more detailed videos.
Thanks for your work 📝🙌
Glad you like them!
Ciao Sven, video molto interessante. Hai mai analizzato MPW? Il suo dividendo mostruoso e il suo prezzo in estrema sofferenza potrebbero farla diventare una buona opportunità?
divertiti!
One of the best (if not the best) educational videos on this topic!
thanks!
Sven very good, even if it is possibly too early for reit I am curios that Burry bought hudson proporty, mcap is equal to cash, it would be interesting to check details
Thank you Sven!Very helpful. How about STAG?
Sven thanks for the video. Prologis is bought by 7 guru's in Q3 (stockcircle) among them Ken Griffin, Ray Dalio, Steven Cohen what do they see that you don't?
let them have it:-)
Great video. I'm invested in housing reits. I'm also worried about the debts, thats why I search for reits with lower debts but that are still butchered by the market. Especially reits that cut their dividend are really nice in my opinion. They get dumped by in mass by pension funds the moment they stop paying dividends. However, companies like this only get more healthy by paying off debt. Win-Win situation if you ask me.
Thanks Sven and thanks for the Canadian shoutout eh!
The Canadian housing market seems to be in a bubble but one must keep in mind that Canada's population is growing like crazy with immigration. I think something like a million people immigrated to Canada in 2023. Thats 2.5% of the population in one year! And that's scheduled to keep going per gov't immigration targets for the next several years. All of those people need a place to live in. I think smartcenters is in a good position to capitalize, but of course there can be a much better time to buy if/whem market panics.
Thanks for sharing!
🇨🇦 Canada loves Dr. Carlin’s market reconciliation.
:-)
I feel like this REITs are good to buy when the interest rates are starting to go down, even if you miss the upside and the divi by not buying on the way down. You get lower rewards with lower risk.
:-)
I kinda like REIT’s, but certainly most of them are overvalued and also overleveraged... I just invest in the cheapest and best and I'm planning on reducing my positions because all this debt bubble that's gonna burst catastrophically sooner or later! Meanwhile I get nice dividends and some price gains too. Thanks.
on your comment at 5:30, i can see the reason why it could be liked. If they have a worst deal on their own debt, they can now use the additional cash flow from the acquisition to paydown a more expensive debt, while surfing on the lower debt payments from the new business. If it's the case, i'd be happy too... No idea if it's the case, just picturing how it can be a potential good news.
what additional cash flow? it is debt, it has a cost
@@Value-Investing But if your current debt is let's say 5% and you got debt from aquiring company at 3%, of course debt is debt but this is cheapeast you can get
Yes, he is wrong on that debt part. He didn't read a full sentence there, which explains it all. @@damianmysciak3264
Another I watch, and owned at one point, is LTC.
Mostly long term care facilities (hence the name), and some other medical properties.
Riocan reit ( Canadian). I like more. But how you said... Thank you for video.
You got it!
Hm. I have some MREL and am considering buying more… I guess I’m thinking interest rates are going to steady out.
Good video! A lot of content👍! You've shown us all possible outcomes but investing isn't science only it also includes a lot of psychology/irrationality (if it weren't so we couldn't make a buck) aka Buffet's famous "Mr. Market"! I invest in REITs because:
- I think that interest rates will go lower ... for one, one reason only: a lot of countries are heavily indebted and would be unable to service their debt on the long run. And all politicians wan't to be reelected guess what they'll do?
- a lot of REITs are already heavily discounted
- quantitative moves out of bonds with lower rates back into the stock market
...
I'm aware of the risks if history goes the other way but you're always take a risk when investing🙊
Can you please make one video about VICI Properties ??
Sven what do you think about buying the bonds of the reits companies now (BBB - BB) can you make a video about ? It is debt supported by real state no?
debt is supported by RE, but what if that RE is priced wrongly, commercial properties that were costing 1 million and now worth half...
I think office reits are incredibly undervalued. A lot of them fell 75%. Some reits have P/AFFO of like 2.5-4.5!
Fast graphs recently published video on Reits being best investment in decade.
possible, but there is also more risk, as a value investor I have to point out the risks first!
Hello Sven, can u make an update on Bayer AG?
Sven, can you give us an update on ACOMO, about the recent crash, the stock sufferred?
just sent an email on the platform!
@@Value-InvestingHi, which Platform? Thanks
@@dagobert7667one where you pay to see how stock go down
Best asset 2023 ❤️
thanks for sharing!
as a real real estate and stock investor myself, I will share my point of view: individual pieces of RE you can have higher return and also higher risk. also having to take care of it. The biggest risk is the lack of cash flow when the property is empty, specially if you leveraged it.
REITs will offer a lesser and more tranquill cash flow with zero effort to manage it. I recommend finding yourself a balance. Too many RE properties and it will become a full time job.
REITs run the same risk ;-) when the bank comes calling!
Hello from Canada, the place where we have it good and have the less worse REIT 😅
:-)
look at US Debt. The Yields wont stay high 5-10 years. Maybe 2-3 Per cent. Realty buy most things with stockshares. The refinance of debt is ok for the next years. At Germany the Rent will be increase. But the government a big risk.
Thanks for sharing
lot of tax considerations for retail investors when owning REITs.... many more forms to fill out, have to weigh the tax advantages/disadvantages of owning REITs vs other (less complex) asset classes, etc etc
good points, thanks for sharing!
Sven can you please review Acomo after the recent drop?
just did on the platform
financially Educated! Regardless of how bad it gets on the economy, I still make over $22,000 every single week
That's awesome!!! I know nothing about investment and I'm keen on getting started. What are your strategies?
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Why didn’t reit companies get fixed interest rates of 30 years? It was possible to borrow even below 2% in Europe on real estate.
they can't get that, too risky to lend to them
What to you think of alibaba can you give a update also the rest of Chinese companies (stocks)
just did in the previous video th-cam.com/video/q7VGOUomFpE/w-d-xo.html
Sven, I don't know why are you so biased against REITs. Yes, you can buy real assets, but it requires a large sum of money and your time invested to manage them. Historically REITs have good average returns. Basically the only risk is the interest rate. If you think the interest rate is going to be high for a long time, don't buy REITs
is it me that is biased or you? :-) I am just discussing the risk and reward :-)
Hi Sven, I think you mentioned a community on the research platform? I am signed and reading your documents but I'm not sure how to join the community (if there is one)?
just the comment section, the platform is the community :-)))
I think there' s something between great and ugly. In difficult times Realty Income usually does solid and other A rated REITS as well. I prefer diversified REITS with good balance sheets.
thanks for sharing!
Acomo is crashing … maybe it’s now a great opportunity? Video please 😁
research platform
we need a big break out of reits to start buying
The REIT sector tends to be the first sector to recover after a recession. So let's wait until we get an actual recession ...
It is possible that recession is already here, but not reflected yet in official statistics. Germany and Japan are in recession already, China is struggling to recover.
@@druvaciam5407 right; sometimes recessions don't get declared until they are already over.
:-)
While real estate in the US is a mess (especially office space), Singapore appears more a stable market. The Singaporeans LOVE their property, live to shop (it's the main form of pleasure and exercise there) and everyone has returned to the office. The most important thing there ATM seems to be not so much to pick the best (although very nice if you can do that.....) but to avoid the bad. And most of the bad have high US exposure - so best just avoid the US altogether.
I like Mexican REITs
thanks for sharing!
Let the real estate pain feel the pension funds.... 😅
:-)
Property will rise due to high inflation, it was always happening in the past and will happen in the future again.
thanks for sharing!
Look its canada stoxks!.
:-)
I’m not touching REITs until Cathy Wood buys a bunch at the peak and sells at the trough.
hahaha
O continues to make little sense . Its 5y price is -24%, huge size makes future growth probably anemic and there are far better companies with competetive advantages.
Why are you talking about real estate prices? The stock market has already priced in the decline. High-quality REITs have halved in value. If not buying REITs now, then when? O for example rises dividends for many decades every month. With higher rates in the past than today. And the relevant indicator for REITs is AFFO. And this is without RE-Prices. This are mostly rents. And they are rising and rising.
REITs first went up 2x, now 50% down, those are where those have been just a while ago :-)
I don't like reits. I'd rather invest in Canadian banks to get my exposure to real estate
if O gets 7-8% return on their 4.1 billion debt which is issued at say 6% ofc they benefit lol
yes of course, but that debt won't be that cheap for long...
Is the debt fixed or floating rate?
interesting channel but the sound quality is well...hum...terrible , you might want to buy a decent microphone
Unfortunately I bought a few of them and tested, even worse, will have to see! Thanks for the feedback!
Sound is fine for me. What is your concern?
@@Value-Investingmusic to my ears
This guy has no idea what he's talking about. Re: Realty income's debt expense....he failed to mention their huge acquisition that they made. He just uses a very narrow view of investing and applies it to all types of investments. Stay in your lane Sven. You are an amateur investor that doesn't even do their research on the companies they talk about. You talk about their interest expense without pairing it to their growth in affo per share over that same duration. Not sure if you would have achieved those three letters in your title had you gone to a United States University
Oof
You could have done NWH.UN and had a good "I told you so" segment!
:-)))
Why is Vonovia not a REIT?
In germany REIT Structures are not allowed in the sector for rental apartments and living space only in the commercial real estate sector. It's a highly regulated space as well with lots of government intervention on rent escalation, so i would not touch it for that reason alone.