Yoram Eliyahu Considers Value of REITs in Today's Market
Experts in the housing market indicate positive signs of slow growth, investors are turning to real estate investment trusts as a way to gain considerable returns and diversify portfolios. Yoram Eliyahu comments on this trend with optimism.
PHILADELPHIA, PA, October 08, 2012
Over the past few years, the housing market has remained an insecure spot for investors; however, recent signs of a slow recovery show that real estate investments can offer promise, especially through investments in real estate investment trusts (REITs). As an experienced professional in real estate, Yoram Eliyahu explains the attraction of REITs, "When it comes to real estate investments, many are reluctant to put their money into a single property, as such a commitment may place a lot of responsibility on the individual concerning only one location. This pays off for some, but also carries risk. REITs, on the other hand, were established to allow companies to own and manage a collection of properties that are diverse. These could include properties such as corporate spaces, apartment buildings or regional malls. With the help of investors, REITs can fund these projects, but must offer a considerable return to the investor while also supplying an opportunity for the investor to diversify their portfolio."A recent article from CNBC highlights the focus on REITs and states, "Publicly traded U.S. REITS--with combined market capitalization of more than $500 billion--have outperformed the broader stock-market, although investors would be wise to choose holdings based on sectors, geographic markets and company quality." While the promise of REITs seems to attract many investors, the article also notes that these trusts have to offer a lot more evidence regarding security. It states, "Balance sheet strength and dividend growth potential will be differentiating factors for REITs, which need to show they can weather economic uncertainty and dislocation and increase their dividends to outpace rising interest rates and inflation."
Having spent years in real estate, Yoram Eliyahu understands the fluctuations that can take place in all sectors of the industry. He states, "No matter how an investor decides where to place their money, the real estate industry always holds a certain amount of risk. However, REITs seem to help minimize that risk, as they operate in a way similar to mutual funds." Still, as the article indicates, it is essential that individuals not make blind investments and consider all options before making a decision. For example, many investors are considering whether to invest in REITs that specialize in commercial properties or those that focus on housing. With mild economic growth, REITs that control shopping malls and apartment buildings have shown considerable progression as they have been able to increase rental prices.
However, Yoram Eliyahu cautions investors, "If one is determined to take part in real estate investment for the long haul, it is essential to project far into the future. As the article notes, with so many individuals turning to apartment rentals, the cost of homes may dip and individual home sales may increase in future years as consumers become more financially confident."
ABOUT:
Yoram Eliyahu is a real estate professional who offers industry insight and unparalleled customer service to each and every client. A leader in the commercial real estate field, Yoram Eliyahu guides his clients through the process of buying and selling properties.