動画公開日：2023-08-18 01:57:47
I stopped buying real estate to buy REITs instead because they earn higher returns with lower risk and less effort in most cases. Example: Realty Income (O) has managed to generate 15% annual returns, but most private net lease investors would have been happy to earn a ~10% return with the same strategy. I also discuss three major misconceptions: you cannot use leverage when investing in REITs. REITs are not tax efficient. Finally, rentals generate 20-30% annual returns. All three are wrong and I explain why. 🎁You can access my entire REIT Portfolio by taking a 2-week free trial to my REIT newsletter, High Yield Landlord: https://seekingalpha.com/checkout?service_id=mp_1268
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Why REITs earn higher returns than rental properties? There are 10 reasons. In short: REITs enjoy significant economies of scale. They develop their own properties. They skip brokerage fees. They do sale and leaseback transactions, etc. To give you an example: Realty Income $O has managed to generate 15% annual returns for its shareholders by buying Class A net lease properties with a conservative 30% LTV. Most private net lease investors would have been happy to earn a ~10% return.
Why REITs are safer than rental properties? REITs are liquid, professionally managed, diversified, less leveraged investments and shareholders enjoy limited liability. With the right adjustments, REITs are also less volatile than rental properties.
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Image sources: Realty Income, NAREIT, EPRA, Cambridge, YCHARTS, Canva
Important Disclaimer: Leonberg Capital OÜ is long O. This video is impersonal and does not provide individualized advice or recommendations for any specific person. Viewers/readers should not make any investment decision without conducting their own due diligence and consulting their financial advisor about their specific situation. This video is for entertainment purposes only and you are responsible for your own investment decisions. The information is obtained from sources believed to be reliable, but its accuracy cannot be guaranteed. The opinions expressed are those of the publisher and are subject to change without notice. This YouTube channel is managed by Leonberg Research OÜ, a subsidiary of Leonberg Capital OÜ.
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