Real estate securities | Dimitrios Neilas

Real estate securities are ways to invest in real estate properties without actually having to purchase any specific land, buildings or properties. These might include office buildings, housing or commercial properties, such as shops. In 2014, the estimated number of real estate security companies was 456 with a total value of $1.7 trillion. This is likely to have grown in the past two years. The advantage of real estate securities is that they allow owning properties, but investors will not have to commit a huge amount of capital. In this post we will examine a couple of aspects of this part of the global equity market.
REIT’s
Nowadays, most of the real estate securities that are sold and traded are from real estate investment trusts (REITs). Twenty years ago, these kind of entities did not even exist yet. However in the present day, most public property owner’s are structured as REITs, which is a corporate entity that allocates income from rental payments to shareholders in such a way that is efficient in its application of taxation. REITs need to adhere to certain laws, which are different in every country. Additionally, they need to hand out to shareholders a taxed net income in the form of dividends. REITs can substantially decrease their tax fees, as they do not need to pay taxes on the capital gains and net income that they give away to shareholders. There are other organisations that focus more on Real estate development, such as Waterview Capital Corp. These kind of companies are more focused on ongoing transactions, such as the construction of buildings and the procurement of land.
Global Real Estate Securities
A growing number of different countries are trying to promote public financing in commercial properties and buildings.
According to Dimitrios Neilas, an expert on Real estate development at Waterview Capital Corp. – Real Estate Development Company, investors have access to more interesting opportunities in different markets that exhibit different attributes in terms of degree of risk, financial and monetary legislations and their macroeconomic situation, due to globalisation. REITs are not present in every country, and there might be some countries where there are more REITs than in other countries. In countries such as the US and Australia for example, REITs are abundant, whereas in Asia, there are far less to be found.
Real Estate Securities and Different Property Sectors
Similar to other industries, such as consumer goods and technology, securities within a certain property segment usually perform comparable in a certain economic setting. This is due to the different features of each type of property, such as period of the lease, supply limitations and certain economic drivers that in some way affect the tenants of the properties. This will lead to some property sectors having better results than others, depending on these different economic and property-related factors. For instance, apartment REITs are extremely cyclical, as factors such as employment rate and mortgage requirements affects the profitability.

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