Real Estate Investment Trusts (REITs)

Investing in a REIT gives you access to a liquid diversified portfolio of real estate assets, without the need to manage anything on your own. This makes some of the biggest issues with direct real estate investing like illiquidity, management intensiveness, and the inability to properly diversify, go away completely. Just like with stocks, it is possible to buy a low-cost index fund of REITs.

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[dhess]

You and The Plain Bagel are the best things to ever happen to Canadian finance! So many high quality videos!

[goose]

Really like your videos. I am overweight REIT's because I like/understand the sector but don't like managing individual properties (used to do it, too much effort for not enough return IMO). I like the idea of "owning" cell towers, data centers, and health care properties, because these will *hopefully* (sigh) not fluxuate wildly during a recession. I am sending your video to my advisor to ask for his opinion on your opinion. Great video, looking forward to the next one.

[arthurobrien]

"0.513 which is low"



Psychologists cry in the background.

[charlesrichardson]

I am finding your talks fascinating. I love the research base of your talks, and the succinct clarity of your talks. I do find myself looking up the papers you mention and following those to others. I have bascially said this twice, but I find your videos a great service.

[_matt_howard_]

Hey Ben! Could you make a video on the five factor model?

[jackpalmer]

The quality of your content is outstanding Ben. Thanks

[Misterioso]

Funny, I was ready to argue about the superior historical performance of Equity REITs compared to S&P 500, and the diversification benefit. However, first I opened MorningStar and plotted 5 neutral ETFs: VOO, IJS, IJR, ICF and IYR, in a 20 year span. To my surprise, I saw the Real-Estate ETFs "dancing" with the value smallcap indexes, reaching the end close to each other, while the VOO lagged behind. Very good video.

[BRAN]

Someone pointed it out in another video and I can't help but notice now. You never blink!

[thumbliner]

Typical Ben. Takes a deep dive into a complicated topic, and then concludes with a simple idea.

[lucascosta]

In Brazil we have something like the "cousins" of the REITs, called "fundo imobiliário". I was thinking add one of these in my portifolio, this video appeared in a such great timing!

[MrStorbeck]

This is a great video. You did a great job here where you started with some very basic concepts (explaining what a REIT even is), got pretty technical, an opportunity to stretch the depth of knowledge of someone who is at a higher level than "what is an REIT" or someone who already has a high depth of knowledge and wants to understand/question your reasoning, then wrapped it up with some relatively plain English simple to understand "here is how you use this information" conclusions. As an extra awesome bonus you cited sources and linked them. I don't know if that pattern was your intention but it is extremely useful, this is a model that would be well used by just about anybody doing a technical presentation on Youtube and honestly to nearly any audience including customers or management for nearly any technical subject. Well done more please!

[Sonny]

Great Video. Thank you for posting. I own REIT index fund (VGSLX) in my Roth IRA account. I own about 15% of REITS in my asset allocation. REITS are good in Roth IRA accounts in US. This is because, the dividends and capital gain are tax free, once money is put to Roth IRA account.

[ValueForInvestors]

Thanks for the video, this is a great resource for anyone new to REITs. As a US investor, I have the advantage of a Roth IRA, which tips the scale in favor of REITs a little bit more. Personally I'm going pretty heavy into REITs via my Roth IRA. I made a video about why - I actually referred to this video as a source because the info is so helpful. :)

[JamyOats]

Great information. I must admit I bought a REITs ETF mainly for the purpose of having something different and a bit more fun.
Fun is the enemy of the investment world! Although one thing I would say is that if you enjoy going to a casino (i.e. are willing to get a negative expected return for a risk thrill) then this would be a valid justification for stock picking etc. What you lose in expected return you gain in fun. For that reason I've bought some bitcoin - every day is a slot machine, it's great! :D

[Tuxedo_Cake]

Great video. I have rental properties, but like you said, the unit values are large, and they are not divisible/have bad liquidity and I have to manage them. I’ve been wondering if I should get into commercial real estate, but that stuff has a high entrance threshold, and has the same problems. Maybe REITs are a good way to diversify in different kinds of real estate without having huge indivisible unit values, but then again, if the same returns can be achieved with a combination of stock and bond ETFs, why would I bother? When you stated those MERs I was instantly turned off by them, as keeping cost down should always be priority #1. Thank you for another great video, keep them coming!

[corner]

This is without a doubt the best investing channel on YouTube.

[SoCal]

Hadn't considered this before. Sector investing always carries risk, but why add it if little upside? More validation for low cost index funds/ETF's. Thanks for the insights, Ben.

[maleimprov]

I don't know how actionable this insight is in today's context. Bond yields are ridiculously low and concerns about inflation have me wary about including them in my portfolio when I could instead opt for REITs (which are likely to be a strong hedge against possible inflation).

[joe-de-vvre]

Fantastic video as always! I was just looking at REITs into my portfolio the other day and this video addressed concerns I was not aware of. Thank you!

[Richard_Stroker]

One of the few Youtube channels I upvote before even watching the video