Real Estate Investment Trusts (REITs) : nominated investment of the year
Choosing between a direct real-estate investment and investing in REITs shares is very common. A distinction should be made between the rights arguments that allow us to look out for the best opportunities and the best investment climate.
Investment in REITs shares enables to combine the benefits of real-estate investment with none of the typical disadvantages. With the most obvious of them generated from the rent, as we are about to find out.
The diversification of the REITs investment is attractive. Indeed, investing in REITs makes you an utter investor in several regions, business lines and enables you to share risk with other partners and holders. Consequently, rental risks are avoided and the productivity is way more smoothed over time.
Another benefit for investing in REITs is none other than the required minimum investment. It is much lower compared with the traditional real-estate investment – that would mean buying a studio or an apartment to rent it out afterwards. Such a decision would total up to hundreds of thousands of euros.
Investing in REIT Corum XL shares – when Corum AM is the management company – makes it possible, for instance, to invest in houses starting from 285 euros. A patrimony under management is made to have an international presence as much as a presence across the whole Eurozone. The REITs productivity is net of all charges and management fees contrarily to the productivity of a traditional investment to which you have to deduct insurance costs, tenant management costs, and, sometimes, construction costs. And let’s not forget that a REITs investment is not subject to notarial costs, as the notary is provided as soon as you buy real property.
Let us come back to the point of the rental constraints of physical real-estate investment. With a direct investment, it is assumed for you to get directly involved in the management of the investment property. Unless you use an agency, which implies additional costs, you will have to face rental risks – unpaid rent, rental vacancy, constructions, maintenance. These are just some of the costs that can quickly reduce the return.
As far as the REITs are concerned, they are run by management companies. Acquisition, management, promotion of a quality property, are the first actions of these high-quality shareholders. Corum AM, La Française, BNP Paribas Reim, Périal or even Primonial are leading figures of the REITs management. Real estate holdings are present in every French regions, nay in the Eurozone for some of them (Corum XL for instance).
Tenant companies are key players in every sectors of activity. Private or public companies, hotels, medical facilities, laboratories, accommodations of activities, offices, are all carefully selected by the managers.
Investing in REITs is also a pledge of return. With an average return about 5% for years, for all REITs, you can reckon on real performances, especially if you compare this deal to others. Liquidity, too, is significantly more attractive on REITs’ side. The re-sale of shares is much more easy than the re-sale of a real property. The management company buy out the shares the investor doesn’t want anymore. No need to call for an applicant for his offer. The re-sale of a studio or an apartment can prove to be long and interspersed by a multitude of administrative procedures. The re-sale of REITs shares is a piece of cake.
La Centrale des SCPI’s (French office of REITs) founding partners have well understood the issues of such a deal. A few years ago, the success story began. The opening of La Centrale des SCPI, the indispensable distributor for the REITs, took place at the 15 rue Saint Roch in the first arrondissement in Paris.
Today, Lionel Benhamou, Véronique Baron and Grégorie Moulinier announced in a communiqué the expansion of the agency, to the same location, in order to become the first distributor hub of REITs in Paris.
The latter have also developed the pioneer distribution website for REITs online. www.centraledesscpi.com is a leader in its field and offer all the tools necessary for a subscription in total autonomy.
It is up to you to go for a modern investment. The REITs are overshadowing traditional real-estate investment which raises nowadays too many constraints that you lack time to deal with.
Article publié le 16 juillet 2017
Article publié le 16 juillet 2017
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