REIT shares provide investors with management, leverage, liquidity, dividends and diversification. The total return from real estate is the current yield plus appreciation. The appreciation on the leveraged portfolio can be substantial. During most interest rate periods, REITs can borrow funds at lower rates and invest the proceeds in real estate at higher rates. Debt leverage at these times can enhance both current return and total return.
Properties are now available below replacement costs.
Real estate values should grow with economic growth, population growth and inflation. REIT shares are an excellent means of participating in an exciting real estate market. It is not necessary to wait the entire ten years to obtain an indication of the investment results. Over the next three years, the market for industrial properties will either decline, remain the same, or improve. If the market improves, the values of the properties will be improving, and the improvement will be visible to astute investors.