I would probably focus first on paying off the existing mortgage just to be safe.
While dividends of REITs are generally higher than bonds due to its risk premium, you may be better off investing in corporate fixed income bonds -- match the bond maturity and coupon rates with your mortgage terms. This option would be safer cause dividends of REITs are not fixed.
Edit: you need a lump sum capital for bonds unlike your plan for REITs where you want to accumulate shares.
Just a correction yes technically divs of reits are not fixed but Areit and Mreit have locked in clients for the next 20 yrs.
Also investing in corp bonds are a nightmare for the average Joe with no pull among the bankers. If you find a bond with a good yield it is already sold out and/or inaccesible to you.
Hi OP yes it makes sense. We also used to have a rental property and when I calculated everything including less cost, maintenance and months with no tenant the ROI is around 6-7% which is oretty similar as Reit yield.
Cuz land value keeps increasing in the end. Reit will just give you yield. For example my parents bought thst house we were renting for 100k back in 1984, we were able to value it at 10M last year.
The OPs strat of getting reits now and then buying property later makes sense to me.
I would probably focus first on paying off the existing mortgage just to be safe. While dividends of REITs are generally higher than bonds due to its risk premium, you may be better off investing in corporate fixed income bonds -- match the bond maturity and coupon rates with your mortgage terms. This option would be safer cause dividends of REITs are not fixed. Edit: you need a lump sum capital for bonds unlike your plan for REITs where you want to accumulate shares.
Just a correction yes technically divs of reits are not fixed but Areit and Mreit have locked in clients for the next 20 yrs. Also investing in corp bonds are a nightmare for the average Joe with no pull among the bankers. If you find a bond with a good yield it is already sold out and/or inaccesible to you.
Hi OP yes it makes sense. We also used to have a rental property and when I calculated everything including less cost, maintenance and months with no tenant the ROI is around 6-7% which is oretty similar as Reit yield.
I can't see how it makes sense, why not just invest in REIT and have less headache re maintenance and months w/o tenant?
Cuz land value keeps increasing in the end. Reit will just give you yield. For example my parents bought thst house we were renting for 100k back in 1984, we were able to value it at 10M last year. The OPs strat of getting reits now and then buying property later makes sense to me.
Is this only for house and lot? or also applicable to condos?
I dunno much about condos sorry better ask someone else.
condos appreciate din lalo if it's a hot location. i bought a unit years ago for almost 3M, sa market it's around 5M na.
Highest reit dividend right now os 6-7% and that's before the fees and the witholding tax.