It usually more than that since if the reit your chose growth nicely, the share price will go up too.
However, Reit is for stable(not as low risk as FD lah) income. If u prefer explosive game, not Reit play loh.

it should

95% of my smf is used to buy Reits...

my financing is about 4.7% pa.

im not targeting the div...im targeting the nav increase year by year n see what it will become in 20 years or when superbull comes.

In current worldwide environment, 7% is considered pretty high return rate.

Very little investment product can come out with 7% yield (if capital appreciation doesn't take into account).

10 years US treasuries 2.6%
Aussie FD (considered one of highest in the world) 4.5%
Malaysia FD around 3%.
Own your residential properties, most around or below 5% net yield only.
Ordinary stock dividend, 5-6% is considered high already.

If you expect a 14% yield, sorry, none. Except when fire-sale time, especially during crisis unfold.

There is one time Axreit got 14% yield, during 2008, when it dropped to Rm1.00, with DPU around 14 cents.
But this was during financial crisis, and lot of risk and uncertainty involved that time, issue like :
1. Re-financing of loan might not able to get, which could trigger the fire-sale of reit properties and collapse of reit,
2. Can't get tenants due to severe recession etc.

Well, actually, there is one class of investment in North America called the Income Trusts and Monthly Income Funds. These can yield up to 12% pa. As we dig more, actually there are quite some instruments out there that can provide quite strong yields too.

Thanks for your long words explainaion !! Ok !1 I'll take out all my FD and sai lang all to REIT,,,,Is better than put in FD,,,,

Please don't, reit is never the same with FD.
There were reit collapse as well, particularly during 2008 (particular overseas one with high leverage one)

There are some risk exposure, it is not a FD.

Ok ~~ But I thought is only 10years++ once time ??

Has it been confirmed that NAV will increase year by year? if assets with lower NAV are injected into existing reits. might pull down the NAV?

Of course its not confirmed.



This post has been edited by asambuffett: Oct 29 2010, 07:18 PM

veilside2010,

How are you going to sai lang in BJCORP and REITs? I keep seeing your posts in these 2 threads. You betul-betul want to buy kah?

Leave little in FD for emergency fund. Other than that I agree you in REIT's if you look for accumulating passive income rather than bit risky capital gain type.

Its better to do some study first than buying in a rush

There is no such thing of asset with lower NAV.

NAV = Net asset value + cash

If you want to inject/acquire new properties, what do you do?
Buy
Buy need cash.

If you use the Rm1 mil to buy RM1 mil worth of asset, the NAV still remain the same at Rm1 mil
NAV will be lower with below condition

1. NAV only will be diluted if you use Rm1 mil to buy a Rm900K properties.

2. Issue new share at a price below existing NAV

3. Company make a loss

4. Properties revaluation resulted in a loss.

I sure betul betul wanna sai lang ler...
So wanna ask for advice before buy...
Nvm...REIT just buy and hold 1st...

Actually not that big a deal. You research, pick, buy, hold. Later, you regret, go sell. Without emergency economy situation, good reit counter's price pretty much stays stable. What are good reit counters? Read this entire thread, I bet you can get some ideas. Good luck.

Thanks. I am looking at no.3 which is the most likely lower NAV scenario. New shares will be issued at lower than existing NAV when market price is trading below NAV. Yep, after the new acquisition, NAV will be pulled down.

Before you wanna buy the counters or any counters at all, be sure to know what you wanna achieve with your invested money. Know your risk level, whether you're risk averse or a risk taker. Invest proportionately according to your risk profile as well as investment objective. Just my 2cents...

In the end, it all depends on the amount of research that you're going to do. Good luck...

Cheers.

if units price r below NAV, theyll surely buy with cash/loan if they still have the room to increase their borrowings. That will keep the NAV still the same

who are "they"? many reits still trading below NAV.

But this is a characteristic that is being observed everywhere, in Sgp REITs too, where the price remains behind the NAV most of the time. This trait is very much unlike other normal listed companies.