Overseas property investing with REITs
If you’re considering alternatives to personal ownership of your investment properties, you’ll certainly be considering the use of Real Estate Investment Trusts (REITs). These investment property vehicles are a good alternative if you don’t have the temperament for dealing with hands-on management of rental properties, be they residential or commercial, or if you find direct ownership of properties to be too risky for your situation and/or personality. For anyone that eschews hands-on property investing, but wants to diversify with some form of investment property, REITs are a wonderful tool for achieving steady returns.
By investing in REITs, as I’ve mentioned in a number of previous articles here, you can diversify your portfolio, keeping a hand in real estate investment opportunities – but letting someone else do all the management. Investment in REITs is just like purchasing shares of stocks in companies – except these companies are funds that invest in some form of property type. Some REITs are publicly traded, some are privately held. Either way, most REITs tend to specialize in some niche area of real estate investment.
The largest REITs tend to be the most diversified – and their investments tend to be allocated amongst both residential as well as commercial properties. In addition, many larger REITs will invest in foreign properties as well. Some REITs only invest in foreign buildings. And a newer trend is for larger publicly-traded REITs to invest some amount as a stake in the creation of other, foreign-based REITs, many of which are privately held.
Pimco’s latest buy-in
One such example, and worth exploring, is the unique buy-in by the huge REIT Pimco, with over two trillion dollars invested worldwide in numerous types of properties, of a 10% stake in the newly formed Ireland-based REIT, Green Property. It is the first Irish-based REIT of its kind, and it specializes in the investment in mostly commercial, retail properties in the Dublin area.
Its latest public offering raised over $200 million dollars for the express purpose of investing in Irish retail buildings. Not only does this show a resurgence in European business trends and a stronger retail market, it also shows a comeback in one of the formerly-troubled European Union countries, and displays great faith in the rebound of the Irish economy proper.
Having faith in the EU
The fact that Pimco would take such a large stake in the Green Property REIT shows the inherent faith one of the largest worldwide REITs is placing in the success of the Irish economic recovery. And that’s something even a small U.S. property investor should consider in our world-wide economy today.
Green Property REIT is expected to go public very soon, and when it does, it offers yet another option for the small investor to get in on the ground floor of foreign investment – without the headache of having to manage foreign property from these shores. It’s certainly worthy of a good hard look to any investor considering overseas property investing, especially in foreign REIT investments.
photos courtesy of donegalimporters.com, moneycrashers.com, aaii.com, online.wsj.com, marlesshouse.com