The Risks of REIT Investing: 5 MUST KNOWS Before Buying Real Estate Investment Trusts!

Not all my REIT investments are successful! A good example is my investment in CBL & Associates Properties (CBL), which went bankrupt during the pandemic. This REIT bankruptcy cost me over 90%. I take a look at what went wrong and what you can learn from my mistake so that you can avoid such losses. In short, I underestimated the leverage of the REIT because I underappreciated the impact of capex spending on the flexibility of its balance sheet. However investors commonly also make other mistakes when investing in REITs. Just to name a few: they fail to identify conflicts of interest, they pay too much attention to the dividend yield, and they ignore foreign REITs.

Image sources: NAREIT, YCHARTS, EPRA, Canva

Important Disclaimer: I am long ADC; SBAC. 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.

#reits #dividend #passiveincome

[askjussi]

Any other mistakes that I missed? Let me know in the comment section.
Thanks for all your support! All your "likes" are making a big difference and I appreciate it.
Jussi

[davidwysocki]

Thanks, Jussi, for an excellent discussion on the important issues to consider when investing in REITs. Good stuff!

[FELIPERODRIGUES-cvjl]

I have recently lost a lot of money buying MPW, attracted to the div yield; now I understand the risk of just looking yield 🤷. That’s the importance of channels like yours, warning us all about the risks involved. Thank you!

[Rockiii]

“It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.” This is probably The Oracle of Omaha’s most famous quote. There is no such thing as a wonderful, externally managed REIT.

[jameslong]

Very educational and instructional video. Thank you very much, Jussi

[MIA_DaDe]

Hey Jussi! Hope you are well. I appreciate that you share the 'good and the bad" on your investment journey/portfolio performance. Thanks!

[rustypipes]

I've always historically invested for value and growth. Now that I'm retired dividends make a large part of my income. I no longer worry about growth as much as yield. So far someone my age yield IS important!

[commonsense-oggz]

bad management applies really to every business, and not exclusive to Reits. everyone should judge managements, even at their own job.

[readyready-uj]

Nice bounce in SAFE, AHH and other REITS yesterday, let's hope the trend continues!

[whitevanman]

Talking about international REITs this is my REIT portfolio which is 27% of my overall portfolio:-
USA - AHH, CTO, MDV, FRT
Canada - NXR_UN, REI_UN
Spain - MRL, LRE these two are also listed on the USA market under other tickers.
Italy - IDG
Singapore - O5RU
Next step I have my eye on a pair of Japanese REITS and SGRO on the London market might be good.
Happy investing.

[andreasschmid]

Dear Jussi, Thanks for all your highly informative videos! May I suggest to cover Arbor Realty Trust in a future video? Appreciate it!

[reitsforlife]

Would love an update on Alexandria Real Estate. I really like the reit and the discounted price. I am always curious why they have such low trading volume though.

[dailydividendsguy]

I've just been accumulating Realty Income. I hope they continue doing what they do but it's a long term hold for me

[henrikg]

I just sold SL Green at 57. I think its fully valued at this level.

[Alexxf]

Invest in a simple S&P 500 broad ETF / fund. You'll beat the pants off of Mr. Askola's advice and return much more than focusing on REITS could ever get you.

[carlosparra]

About your last point, can you make a video of international Reits? I have been buying American Reits but 30% tax for us non american residents are killing me on those dividends and i want to sell

[dcunha]

Hi Jussy, you are my Reits adviser😊 thanks for every video!!!
I have a question: last week, i bought VICI, PROLOGIS, REALTY INCOME and BIG YELLOW at very low prices. But, how you can see too, the prices explodes!
What i should do???? I want to buy more, but i should wait the fall or keep buying for long term, even at this prices???
Thanks from Portugal 🇵🇹

[hallowiegehts]

Now a exciting phase started for the reits. Was this bump since yesterday just the hype. And not lowering the Rates will smash them down again. Or the train started with fear of missing out. Not quite sure how to invest this now. Luckily was already heavy on reits before

[martingreenberg]

I just purchased my 1st REIT VICI. I didn’t realize it pays its dividend quarterly until after I made the purchase. OOOPS! I assumed VICI paid its dividend monthly like most other REITs. I am glad I don’t depend on receiving the dividend monthly. I will be more aware of the dividend frequency when I purchase my next REIT.

Mask On Nurse Marty (Ret)

[macjackslack]

Which are your favorite brokers for international riet investing?