Get $1,000 Every Month From RioCan Real Estate Investment Trust ... | Real Estate Investing

Get $1,000 Every Month From RioCan <b>Real Estate Investment</b> Trust <b>...</b> | Real Estate Investing

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• Get $1,000 Every Month From RioCan <b>Real Estate Investment</b> Trust <b>...</b>
• Obama Abruptly Waives 1980 Foreign <b>Investment</b> in <b>Real Property</b> <b>...</b>
• Jean Chatzky: How to <b>invest</b> in <b>real estate</b> - Bankrate.com

Get $1,000 Every Month From RioCan <b>Real Estate Investment</b> Trust <b>...</b> Posted: 24 Dec 2015 05:52 AM PST Some investors buy properties and rent them out to receive rental income. Those properties require a huge amount of capital up front. By investing in real estate investment trusts (REITs) instead, investors can invest a small amount and still receive a juicy monthly income. Additionally, a professional management team takes care of the properties and the tenants, so you don't have to. Furthermore, by buying REITs, you diversify your portfolio immediately because REITs typically own and operate hundreds of properties. About RioCan REIT It must be exciting at RioCan Real Estate Investment Trust (TSX:REI.UN) because it announced the sale of its U.S. portfolio of 49 retail properties for $2.7 billion. Some of this capital will be used to pay down debt and acquire more properties, including 50% interest in the Tillicum Centre, a 468,533 square foot shopping centre in Victoria, B.C. from Kimco Realty Corp. In its Canadian portfolio, RioCan owns 305 properties across 43 million square feet, and it earns 74% of rental revenue from major markets: 42% from Toronto, 11.2% from Ottawa, 6.8% from Calgary, 6.5% from Montreal, 4% from Edmonton, and 3.9% from Vancouver. Selling its appreciated U.S. portfolio and sending that money back home while the U.S. dollar is so strong is a double win for RioCan. As RioCan declines a few percentage points after the announcement of the sale of its U.S. properties, you can get in on the largest Canadian retail REIT before it starts drawing value from its new investments. How to receive $1,000 in monthly income Buying 8,533 units of RioCan REIT at $24 per unit would cost a total of $204,792. You'd receive $1,000 per month, a yield of 5.86%. Most of us probably don't have that kind of cash lying around. No problem. You could buy 4,267 units at $24, costing a total of $102,408, and you'd receive $500 per month and still get a 5.86% yield from your investment. Okay, $102,408 is still too much. Instead, you could buy 854 units at $24 per unit, costing $20,496, and you'd receive $100 per month. See what I'm getting at? You'd receive that 5.86% annual income no matter how much you invest. And the investment amount is up to you. Investment Annual Income $204,792 $12,000 $102,408 $6,000 $20,496 $1,200 Is RioCan's income safe? In the third quarter, RioCan's adjusted funds from operations (FFO) payout ratio was 89.7%, so there's no danger to its distribution, although a lower ratio would create more safety for its distributions. The REIT also consistently increases its FFO, which is equivalent to earnings for the typical company. From 2010 to 2014, FFO per unit grew at a compound annual growth rate of 6%. Tax on the income REITs pay out distributions that are unlike dividends. Distributions can consist of other income, capital gains, foreign non-business income, and return of capital. Other income and foreign non-business income are taxed at your marginal tax rate, while capital gains are taxed at half your marginal tax rate. So, to avoid any headaches when reporting taxes, buy and hold REIT units in a TFSA or an RRSP. However, the return of capital portion of the distribution is tax deferred. So, it may be worth the hassle to buy REITs with a high return of capital in a non-registered account. Of course, each investor will need to look at their own situation. For instance, if you have room in your TFSA, it doesn't make sense to hold investments in a non-registered account to be exposed to taxation. In conclusion If you're looking for a safe place to park your money for a 5.86% yield, consider RioCan REIT, which has been paying a monthly distribution since 1995. It currently yields 5.86% and occasionally hikes its distribution. Although RioCan pays a higher yield than GICs and conveniently pays a monthly distribution, it is considered to be riskier than GICs because it's a stock that's innately volatile. Comparatively, at maturity you would get your principal back from a GIC. Want more top dividend stocks? These three top stocks have delivered dividends for shareholders for decades (and even centuries!). Check out our special FREE report: . Click here now to get the full story! Fool contributor Kay Ng has no position in any stocks mentioned. Some investors buy properties and rent them out to receive rental income. Those properties require a huge amount of capital up front. By investing in real estate investment trusts (REITs) instead, investors can invest a small amount and still receive a juicy monthly income. Additionally, a professional management team takes care of the properties and the tenants, so you don't have to. Furthermore, by buying REITs, you diversify your portfolio immediately because REITs typically own and operate hundreds of properties. About RioCan REIT It must be exciting at RioCan Real Estate Investment Trust (TSX:REI.UN) because it announced the sale of its U.S. portfolio…

Obama Abruptly Waives 1980 Foreign <b>Investment</b> in <b>Real Property</b> <b>...</b> Posted: 20 Dec 2015 06:43 AM PST Submitted by Gordon T. Long of the Financial Repression Authority Obama Abruptly Waives 1980 Foreign Investment in Real Property Tax Act The Financial Repression Authority has consistently shown that Regulatory changes which "Ring Fence" US investors choices is a cornerstone of the Macro-Prudential Policy of "Financial Repression". Through stealth programs like FATCA and PFIC the US government has steadily and quietly limited Americans ability to take cash out of the country and to invest abroad, other than through profitable public exchange traded products sold by the financial industry.  However, it is one thing to shut the doors to American investing abroad but it is quite another to fully open the doors to foreigners! It begs the question why, why now and why the change needed to happen so urgently? This week, as the BOJ, ECB and PBOC all continued to aggressively expand credit  the Federal Reserve was "full ahead" in the process of withdrawing approximately $1 Trillion of liquidity to achieve its December FOMC decision to increase the Fed Funds rate by 0.25%. To counteract this policy initiative and the alarming collapse in the HY & IG bond market, the US government immediately opened the floodgates to easy foreign credit in a major policy reversal. A policy decision which was rushed through congress with almost no time for congressional debate. Obviously what was not lost on the White House was the fact that the now troubled $2.2 Trillion of High Yield bonds peddled to yield starved investors since the financial crisis matches 2/3's of the $3.5 Trillion increase in the Federal Reserves balance sheet during the same period. FIRPTA was implemented during a better era for Americans in response to international investors in the late 1980s and early 1990s buying U.S. farmland, as well as the more publicly visible buying of trophy U.S. property by the Japanese.  The US government has now expediently waived FIRPTA. Bloomberg reports: President Barack Obama signed into law a measure easing a 35-year-old tax on foreign investment in U.S. real estate, potentially opening the door to greater purchases by overseas investors, a major source of capital since the financial crisis. Contained in the $1.1 trillion spending measure that was passed to avoid a government shutdown is a provision that treats foreign pension funds the same as their U.S. counterparts for real estate investments. The provision waives the tax imposed on such investors under the 1980 Foreign Investment in Real Property Tax Act, known as FIRPTA. "FIRPTA has historically made direct investment in U.S. property a non-starter for trillions of dollars worth of foreign pensions," said James Corl, a managing director at private equity firm Siguler Guff & Co. "This tax-law modification is a game changer" that could result in hundreds of billions of new capital flows into U.S. real estate. Foreign investors have flocked to U.S. real estate since the global economic meltdown, drawn by the relative yields and perceived safety of assets from office towers and shopping centers to apartments and warehouses. The demand has helped drive commercial real estate prices to record highs. Many foreign investors structured their purchases to make themselves minority investors and bypass FIRPTA. REIT Purchases The new law also allows foreign pensions to buy as much as 10 percent of a U.S. publicly traded real estate investment trust without triggering FIRPTA liability, up from 5 percent previously. "By breaking down outdated tax barriers to inbound investment, the FIRPTA relief will help mobilize private capital for real estate and infrastructure projects," Jeffrey DeBoer, president and chief executive officer of the Real Estate Roundtable, an industry lobbying group, said in a statement. Cross-border investment in U.S. real estate has totaled about $78.4 billion this year, or 16 percent of the total $483 billion investment in U.S. property, according to Real Capital Analytics Inc. Pension funds accounted for about $7.5 billion, or almost 10 percent, of the foreign total, according to the New York-based property research firm. "Foreign pensions are such a low percentage of foreign investment in U.S. real estate because of FIRPTA," Corl said. Investment Surges Foreign investment has surged from just $4.7 billion in 2009, according to Real Capital. Foreign buying this year as a percentage of total investment in U.S. real estate is about double the 8.1 percent average in the 10 years through 2012. Despite a perception that FIRPTA was a response to the wave of Japanese buying of trophy U.S. property in the late 1980s and early 1990s, including Rockefeller Center and Pebble Beach, the act was actually passed in 1980 in response to international investors buying U.S. farmland. Under old rules, foreign majority sellers had to pay 10 percent of gross proceeds from the sale of U.S. real estate as well as additional federal, state and local levies that could increase the total tax burden to as much as 60 percent, according to the National Association of Real Estate Investment Trusts. The change "is a huge deal," said Jim Fetgatter, chief executive of the Association of Foreign Investors in Real Estate. "There's no question" it will increase the amount of foreign investment in U.S. property, he said. Warning The FRA predicts that Americans will face significant increases in US property taxes over the next five years starting in 2016. With the change in FIRPTA Americans should additionally expect property values to increase in 2016-2017. Clearly, foreigners, the "1%" and property owners will all gain from this, but most Americans will simply face significantly increasing property taxes on elevated asset values to fund the ever increasing government debt burden. Americans owning a house can be expected to initially focus on their net worth being higher, and not that they once again will have even less disposable income. Some will learn painfully why the number one killer of small business is cash flow, not profits.. Average: Your rating: None Average: 4.9 (30 votes)

Jean Chatzky: How to <b>invest</b> in <b>real estate</b> - Bankrate.com Posted: 22 Dec 2015 03:05 AM PST Email Email Here's some good news for folks still waiting for the value of their homes to come back. In many parts of the country, the residential real estate recovery is continuing and, after years of pain, lots of people are seeing a nice boost in their property values. Prices in some areas are even looking frothy. Real estate's ups and downs in the past decade have spurred many investors to ask some hard questions about the role real estate plays in their overall investment mix. What percentage of my portfolio should be in real estate? What about real estate securities such as real estate investment trusts, or REITs? Do investment properties make sense in this market and for my circumstances? How much you invest in real estate often depends on whether or not you own your home and how much equity you have built up if you do, says Greg McBride, CFA, Bankrate's chief financial analyst. "For a lot of people, their home might represent a significant chunk of their portfolio. The risk may be that they are too heavily invested in real estate, not underrepresented," he says. That said, for some people, real estate can be a good way to add diversification to your bond and equity portfolios. REITs, which invest in properties and trade on exchanges like stocks, offer investors a liquid way to get into real estate (often reaping high dividends simultaneously). REITs specialize in all segments of the market, including commercial and residential properties in a range of locations. "If you hold a REIT mutual fund or ETF you get instant diversification," McBride says. Other people may want to take real estate investing a step further and purchase actual rental properties. "There's certainly money to be made with that approach, but it's not always easy," warns McBride. Keep these pros and cons in mind when you're considering increasing the role of real estate in your portfolio. Pros Diversification. Investment real estate can provide solid portfolio diversification over the long run because you are holding a hard asset with the potential for high long-term appreciation, says Kristin McFarland, director of strategic partnerships at Darrow Wealth Management. Income. Rental income can provide a solid revenue stream. "We usually estimate a 2% annual return while you are holding the property," says McFarland. "That's a different kind of return than the stock market, but it can sustain you until you cash in on the long-term capital gain." Inflation hedge. A property's potential appreciation can help hedge against future inflation. Cons Cash intensive. This is the biggest obstacle for most investors considering buying rental properties. You'll need the down payment and closing costs as well as the monthly carrying costs. Then there are taxes, maintenance and insurance. Plus, you'll need an emergency reserve for unexpected events such as a surprise assessment or large repair. Labor intensive. Being a landlord is hard work -- often at odd hours -- and therefore not for everyone. If you're managing the property yourself, you're on call 24/7. Illiquid. Your money will likely be tied up for years, especially if you need to wait out a market downturn before selling. Even in good markets, dealing with tenants and other issues can delay a sale.

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