March 15th, 2010 | 
Author: 
A Real Estate Investment Trust, or REIT, is generally considered to be a lower-risk strategy for investors to pool capital with other investors to purchase and manage income property, and develop equity. A Canadian REIT is a well-regarded strategy to generate cashflow and enjoy capital appreciation via an asset-backed security – both rewards of a long-term investment. REITs also feature the tax-saving benefits of individual ownership in real estate while avoiding the full-time responsibility of managing a suite of properties or even needing to accumulate a large up-front cash investment, both barriers to entry typical of traditional real estate investments.
Assets typically range from shopping centres and office buildings to apartment complexes and even warehouse facilities. Investments in REIT real estate syndications are considered by many to be “lower risk, higher return”, and offer many distinct advantages and benefits, notably: they are secured by insured, tangible assets, and you can visit the assets in which you own an interest. Historically, property can be counted upon to increase in value, while hedging instruments can be purchased to offset changes in interest rates. Best of all, REITs are easy for most investors to understand.
In Canada, distributions can be taxed less than interest or dividends, cash disbursement are paid monthly, and disbursements can be automatically reinvested. Some investments may be eligible for Registered Savings or Pension Plans.
Ultimately, performance is largely determined by one important factor: incentives for management to deliver superior results. In a well-structured investment, what’s in it for management plays a major part in determining your success – asset managers earn a performance incentive fee by increasing the value of the investment, and the very best managers, When fees are earned on capital contributions, will charge rates below the standard fees collected by most investment dealers.
Posted in 
Tags: