Why I say that invest in REIT is very safe and low risk? REIT offer an average return of 6-8% annually for their shareholder. The rental received from the property will pay to investor by semi-annual or quarter basis.
Let me show an example. For Atrium REIT, it listed on March 2007.
Income distribution announced on:
18-07-2007 - 2.0 cents
19-10-2007 - 2.2 cents
17-01-2008 - 2.3 cents
Atrium REIT already paid out 3 quarters income distribution as 6.5 cents. So, its annual return is 6.5/3X4= 8.67 (equally to 8.67 cents)
Now, as at 19 January 2008, Atrium REIT closed at 98.5 cents.
Return for Atrium REIT = 8.67/98.5
= 8.8%
As compare to FD (fixed deposit), the interst rates is only 3.7% annually. When we invest on REIT, we can receive 8.8% which is 5.1% higher than FD rates. For future, the increase of rental rates will increase the income distribution for investors.
So, why not we invest on REIT rather than put our money in FD.
Friday, January 18, 2008
REIT is a safe and low risk investment
Posted by
CMH
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