Why not invest in both?Some REITS are offerring fantastic value...

  1. 713 Posts.
    Why not invest in both?
    Some REITS are offerring fantastic value at the moment.
    It gives you exposure to the property market, you do not have sh*tty tennant issues, your equity is liquid.

    You could not buy property at such depressed prices as you can buy a REIT. At the bottom of this post, I have cut and pasted some text from a report that illustrates my point.

    Have a look at Valad Property group or Abacus Property Group and do your own research to see what I mean.

    In regards to buying residential property, there is no hurry to buy at the moment, there is still downward pressure on prices. You should be able to pick up a property at 5% less than todays prices if you hold off until next June / July IMO.

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    from Orbis report Q4 2008

    Perhaps it is easier to see the value by reducing the parameters above into a single building. Take a
    building that costs $1 million to build and generates $70,000 in annual rental income with leases fi xed
    for six years (the average length of leases in the table above). The building has a $570,000 mortgage
    which you have to take over with interest costs of $35,000 per annum. The equity should be worth
    $430,000 with annual pre-tax income of $35,000. The market currently offers this opportunity to us
    for somewhere between $30,000 and $40,000, down from more than $500,000 last year.
 
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