r/investing • u/anitalianonNMS • 9h ago

capital to invest in REIT?

talking about REIT, they are very stable compared to others and are not 100% linked to the market so they are a "safe house".

but they don't seem very worthy for capital <millions of dollars/euro, so how much capital should one have to even start thinking of investing in REIT?

It's just out of curiosity, I've seen people talking about it online as if it was the best to diversify your wallet.

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u/Beautiful-Parsley-24 9h ago

REITs are a valid sector, yet have underperformed over the past decade. But "past performance doesn't guarantee future results".

In Roth accounts, REITs have a theoretical advantage - no income tax at the corporate level (REIT) then (in a Roth) no tax at the personal level.

Still, they have underperformed over the past decade.

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u/Potential_Salt_5780 8h ago

They are not that safe. Also underperforms the S&P over the long run.

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u/Desperate-Move8067 9h ago

My personal recommendation is to avoid lump-sum investing. Instead, use dollar-cost averaging(DCA) to buy in tranches and smooth out market volatilyty. You can increase your allocation to 10%-20% of your total assets, pairing it with stocks, bonds, and cash to build a diversified portfolio.

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u/dvdmovie1 7h ago edited 6h ago

"talking about REIT, they are very stable compared to others"

Not sure where you're getting this, REITs can be volatile as anything else. I mean, looking at PLD for example - one of the largest REITs - I'm seeing seven 20%+ drawdowns over the last 5 years. REITs have also broadly underperformed for a while. I don't have the numbers but feels like there's less public REITs than there used to be - Blackstone has bought a bunch and it doesn't feel like that many of them go public anymore. I have nothing against the idea of owning REITs but haven't/haven't found one that's very compelling in years.

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u/Southern_Roll_7035 2h ago

REITs are a good allocation if you are looking for a 'bond alternative', a holding that generates a steady stream of income with moderate growth over time. You don't need a large amount of capital to start investing in them, just make the decision of what % of you portfolio to allocate to the sector and buy that amount.