How many reits in canada

REITs have historically produced a track record of strong performance. REITs, or real estate investment trusts, are companies that own or finance income-producing real estate across a range of property sectors. These real estate companies have to meet a number of requirements to qualify as REITs. Most REITs trade on major stock exchanges, and they offer a number of benefits to investors.

REITs historically have delivered competitive total returns, based on high, steady dividend income and long-term capital appreciation. Instead, unit holders are taxed upon receiving the distribution.

This makes REITs an incredibly simple way for the average investor to ride the coattails of the Canadian real estate industry, which has benefitted from massive appreciation over the last few decades.

In urban centres the gains are even more pronounced. Of course, the past does not represent the future and real estate prices have dipped before, most notably in the early s when property prices sank and took over a decade to regain their former value. By far the biggest advantage to REITs is you can be a landlord from afar; that means no late-night calls when the plumbing backs up—and no need to book an exterminator. Here are some of the other issues you can sidestep by choosing to invest in a REIT:.

Flipping a home costs even more, and it requires extensive construction or project management experience. You can sell as many shares as you want in a REIT, but you cannot sell a single brick in a house. If you hold units outside of a registered account, it does get a little more complicated, as distributions from a single REIT can come from multiple sources, such as capital gains and income, and you must pay tax on those different types of income accordingly.

REITs also pass along tax advantages to unit holders, such as expenses and depreciation. All of this will be broken out on your annual T3 form for tax-reporting and payment purposes. As a landlord you are likely renting only to tenants, or perhaps to a small business. But REITs have the capacity to rent to various industries, including huge retail and business clients. Leverage is the biggest advantage that landlords have in building wealth. Using a minimum of your own cash and having someone else cover the debt cost magnifies returns but also losses.

Banks simply do not lend investors the same amount of capital at the same low rates that they do to landlords. You can still use leverage when purchasing REITs, either through an investment loan or a line of credit and write off the interest the same as you would a mortgage, but it will likely be on a smaller scale.

You must pay your full marginal tax rate on any income distributions provided you receive them in a non-registered account. Any investor who is prepared to take on a medium-risk investment and values passive income is a good fit for a REIT.

Investors who have a very low tolerance for risk and need the money within three to five years should perhaps consider staying out of the stock market. Like all stocks, the price bounces up and down on a daily basis, but I have confidence that property and land values will continue to rise over the very long term around 30 to 50 years. Your email address will not be published.

For example, some REITs only buy or manage automotive dealerships or grocery stores. REITs make it easy to tailor your real estate holdings. This would be nearly impossible for the average investor to do on their own. It may be self-explanatory, but an open-ended REIT does not have a fixed number of shares. When you purchase shares of an open-ended REIT, new units are created, and your funds are added to the overall pool.

When you sell your shares, the number of shares decreases by the same amount, and your funds are paid out. Not surprisingly, a closed-ended REIT works the opposite way. Shares are issued through an initial public offering IPO and are fixed. The share price will rise and fall based on market demand — in other words, what investors are willing to pay.

Like a stock, a REIT is a market investment that fluctuates in value and is not guaranteed. Therefore, there are inherent risks when you invest in REITs. One example is how market cycles can impact REIT returns. When the real estate market drops, REITs tend to follow suit. REIT values can also fluctuate with interest rates. As rates rise, REIT values tend to rise, depending on other factors.

This is why you should never invest all of your money in REITs, or any single asset class for that matter. Others focus on a specific industry sector and are more suitable as a complimentary REIT holding.

Automotive Properties and Slate Grocery are good examples. Keep in mind that inclusion in this list is not an endorsement of any of these REITs. Like stocks or any other market investment, REITs fluctuate in value, and returns are not guaranteed. When you purchase a REIT, you could lose your principal investment. I always recommend consulting with a professional before purchasing any investment. Artis REITs pays a healthy dividend of 5.

Revenue growth has also slowed.