Earlier in the year, I wrote that the time was approaching to consider investing in an apartment REIT. Well, this past week, I got the confirmation I was waiting for …
Bloomberg published the results from a study that found that during this year’s second quarter apartment rents in the
Some reasons for the jump:
· Home
foreclosures — The rising number of homeowners kicked out of their homes need some
place to live.
· Collapse
in housing prices — Many homeowners have simply walked away … sending the key
to their lender … once their equity got wiped out by the Great Recession. Like
those who were foreclosed on, they need to live somewhere.
· Lack of
confidence — Consumers are worried about the economy and their jobs. Thus
they’re afraid to make any long-term commitments.
· Bad
credit — Unlike last decade’s freewheeling lending standards, lenders are now
reluctant to lend to buyers with poor credit.
Will the trend for rising rents continue? I’d say yes. And last week’s disappointing jobs report backs me up.
I’m looking at a few REITs that specialize in residential rental real estate. And I’ll post them after I’ve picked one to buy. Meanwhile, you might want to check out this is sub-sector of the real estate market on your own.
Portfolio Update
The REITs in the e-FinancialWriter portfolio are doing exactly what they’re supposed to do — beating the pants off the S&P 500 — and up 31.82% since inception.
|
REIT
|
Sector
|
Blog date
|
Price
|
Closing price 07/06/12
|
Return to date %
|
Dividend yield %
|
|
PSA
|
Self
storage
|
90.75
|
144.61
|
59.35
|
2.84
|
|
|
|
|
|
|
|
|
|
|
VTR
|
Health
care
|
52.87
|
63.43
|
19.97
|
3.79
|
|
|
HCP
|
Health
care
|
|
36.81
|
44.41
|
20.65
|
4.44
|
|
HCN
|
Health
care
|
|
47.53
|
59.01
|
24.15
|
4.99
|
|
|
|
|
|
|
|
|
|
IAECREIN:CN
|
|
19.45cn
|
24.99cn
|
28.50
|
0
|
|
|
ZRE:CN
|
|
|
16.29cn
|
20.24cn
|
24.25
|
4.99
|
|
INVRLPRA:CN
|
|
|
5.45cn
|
5.50cn
|
1.00
|
1.74
|
|
NNN
|
Retail
|
27.18
|
28.37
|
4.38
|
5.44
|
|
|
|
|
|
|
|
|
|
|
Index
return
since
inception*
|
|
|
|
|
31.82
|
|
|
Avg 12-mo
return of
REITs in portfolio*
|
|
|
|
|
17.59
|
|
|
Avg
dividend yield of REITs in portfolio
|
|
|
|
|
3.50
|
|
|
12-mo
return
S&P REIT
index as of 07/06/12*
|
|
|
|
|
8.92
|
|
|
12-mo
return S&P 500*
|
|
|
|
|
0.81
|
|
Source: Bloomberg
*Does not include dividends paid
If you have trouble seeing the chart, just in zoom in
with your web browser.
Enjoy
your weekend!
George
P.S. I’m on Twitter. Follow me at http://twitter.com/efinancialwrite for frequent updates, personal insights and observations on how to have a healthy retirement.
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