Image Source: reynermedia In a poll of North American millionaires last year, almost 90 percent indicated real estate, and specifically direct investment as their top choice. Those moves are expected to pay off as we roll through 2015 and the macro trends continue to indicate that direct investment in real estate remains a smart move for both higher net returns and wealth preservation over the next quarter. Super-sized, publicly traded REITs used to be one of the default investment vehicles for affluent investors seeking diversification and ease of investing. However, around 24 months ago the data and surveys began to show that experienced global property investors were increasingly trending towards investing in real estate through smaller partnerships, and opting for direct investment, rather stock in large phantom portfolios. Comparatively, low yields have continued to be one of the most significant detractors when it comes to evaluating the performance of the largest funds. They move slowly, carry enormous amounts of administration expenses and their need for equally large deals and capital preservation often sees funds placed in the most overvalued, least liquid and slowest growing properties. The world is changing fast and this definitely applies to real estate, as it pertains to which destinations will perform best or completely fall over the next 12 months. Unfortunately, large REIT investors don't often have in-depth ideas of how their portfolios are holding and have no control over their acquisitions. While all real estate will eventually go up, few Canadian investors really want to experience a dip if they can afford it and historically REITs are subject to extreme volatility. In contrast, direct investment and smaller partnerships offer incredible agility in investing. They allow investors to act quickly to restructure or acquire acquisitions swiftly, while pinpointing the very best investments for optimal performance. Most importantly, direct investment means retaining a hard asset that isn't going to be vaporized by emotional turn in the equities market.
- September 6, 2017
- By editor
- News
- No Comments