REIT stands for real estate investment trust. REITs typically own income producing real estate, and flow most of their earnings through to unitholders. REITs are usually publicly traded, and investors like REITs because they generally have high yields. That’s because they flow at least 90% of their taxable income through to their unitholders.
A REIT company owns real estate and produces income from it. This includes shopping malls, office buildings, hotels and so on. They may also manage real estate for third parties, such as providing property management for condominiums or apartments.
Canadian REITs must be a corporation that’s taxable, and follow all the rules of being a corporation. They must invest 75% or more of their total assets in real estate and make at least 75% of their gross income from their properties, including rent, financing and sales. Like most stocks that are publicly traded, they operate by the rules of exchanges, and require no less than 100 shareholders, and must have more than 50 shareholders.
Like anything in real estate, hidden risks often come dressed up as “investor benefits.” For example, “small town” may sound like a benefit, but small towns often depend on at most a handful of employers. If one of the town’s main employers reduces its operations or shuts down, tenants leave town. As populations shrink, the town’s rental accommodation vacancy rate can go up and stay high indefinitely. Small-town real estate has to provide above-average returns in good times to offset the higher risk of loss when the market turns downward.
If you’re looking to invest in REITs, please keep TSI Network’s three-part Successful Investor philosophy in mind:
Discover how to put an extra strength in your portfolio with our specific advice on how to identify high-quality dividend stocks. It’s all in our newly updated report, Dividend Paying Stocks: How High Dividend Stocks Can Supercharge Your Income Investing. And it’s yours FREE!
FORTIS INC., $60.33, Toronto symbol FTS, is a buy.
The company is the main supplier of electrical power in Newfoundland and PEI. Fortis also owns electrical utilities across Canada, the U.S. and the Caribbean. In addition, the company distributes natural gas in British Columbia, Arizona and… Read More
You should remain wary of stocks that attract broker/media attention because of high-profile products or services, and their business models. Here’s a closer look at one stock with risks that prospective investors should take into consideration:
AUTOMOTIVE PROPERTIES REIT, $11.99, (Toronto symbol APR.UT; TSINetwork Rating: Extra Risk) (automotivepropertiesreit.ca;… Read More
Extendicare sold off its retirement living operations in 2022, and its current focus on long-term care homes and home health care has paid off. The stock has now regained all the ground it lost after the onset of the pandemic—we think it can go higher… Read More
SUNCOR ENERGY INC. $49 is a buy. The company (Toronto symbol SU; Conservative Growth Portfolio, Resources sector; Shares outstanding: 1.3 billion; Market cap: $63.7 billion; Price-to-sales ratio: 1.2: Dividend yield: 4.4%; TSINetwork Rating: Average; www.suncor.com) is using self-driving trucks at its oil sands projects in Alberta to cut… Read More
Here’s what we think about real estate investing in Canada — and it may surprise you
We’re constantly asked about real estate investment in Canada (or investment in Florida real estate, for that matter), and we understand the appeal. Even though today’s house prices still remain… Read More
You Can See Our CWA REIT & Trust Portfolio For September 2024 Here.
We think investors will profit most—and with the least risk—by buying shares of well-established companies with strong business prospects and strong positions in healthy industries. You should also take care to spread your… Read More
The last couple of years, higher interest rates have increased the appeal of bonds and hurt REITs. Still, Choice Properties and RioCan remain excellent ways for investors to earn income, especially with rates now falling. We see both as buys.
CHOICE PROPERTIES REIT, $14.92, is a buy. Canada’s… Read More
A: Crombie Real Estate Investment Trust, $14.90, symbol CRR.UN on Toronto (Shares outstanding: 181.1 million; Market cap: $2.7 billion; www.crombie.ca), owns, operates, and develops real estate assets.
The real estate investment trust, or REIT, has 304 properties made up of about 19.3 million square feet. Retail… Read More
Here are two retailers that continue to pay investors regular dividends with above-average yields. Their leading positions in niche markets continue to spur their earnings, and that gives them more room to keep raising your dividends.
NORTH WEST COMPANY $45 is a buy. This retailer (Toronto symbol NWC;… Read More
This REIT owns some of the best properties in Canada’s biggest cities. Despite the disruptions caused by the work from home and online shopping trends, its high-quality holdings should continue to attract tenants.
We’re not concerned about the recent slight cash flow hiccup as growing revenues… Read More
Learn everything you need to know in 'The Canadian Guide on How to Invest in Stocks Successfully' FREE Special Report from The Successful Investor.
How to Invest In Stocks Guide: Find 10 factors that make your investments safer and stronger.
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