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Investing in REITS: Real Estate Investment Trusts - Revised and Updated Edition (REIT) 2nd Edition
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Top Customer Reviews
Part 1 of this book give an overview of REITs. In particular Chapter 2 shows why REITs are different (not better) than than electric utilities, bonds, and preferred stocks.
Part 2 of this book discusses the history of REITs and then some of the myths regarding REITs. REITs have been around since 1962 when a law was passed that excluded REITs from corporation tax if they paid out 95% of their taxable income as dividends. Before 1962 small investors could invest in real estate in limited partnerships. The myths probably arose because investors confused REITs with these limited partnerships.
Part 3 discusses how professionals evaluate REITs. For most equities earnings are the important number to look at. But real estate can throw off alot of depreciation for tax purposes, but the real estate is not really depreciating (very much hopefully). The numbers used to evaluate REITs FFO, AFFO, NAV (and much more) are explained in this part. By the way the balance sheet and income statements of REITs are much easier to understand, in my opinion, than other corporations. That's because most of the assets are hard assets and the revenues are stable.Read more ›
When the current edition of his book ("cobalt cover") was newly out, I took an online course from Block using the book as text. I was engaged in a total immersion crash course in investing (long overdue), being newly retired and confronted with managing for income a rollover IRA (having disengaged a 401K from my former employer) which was my primary asset outside of my house. The market had just crashed, and would go down further. Better late than never, but a painful six months educational process, as I learned how to reconfigure and manage the IRA myself.
The book and course convinced me that REITs belonged in my portfolio and I allocated a portion of it (initially 7%) to a combination of individual REITs and a highly rated REIT mutual fund. Prices were down along with the rest of the market, so in that respect it was beginners luck.
However, I used Block as a mentor and watched which REITs he favored in a fund he managed (which had too high an entry investment threshold for me to get into myself). I acquired a few more individual REITs in the following year when the market dipped. It has turned out to be a valuable investment and helped noticeably to reduce risk by diversifying the portfolio, and has also yielded a steady portion of income. The book was essential for review and reference in the practical business of managing my REIT segment of a "long haul" and income portfolio, vetting possible acquisitions and navigating the jargon of REIT annual reports.
I would note that Block puts out a monthly newletter discussing the REIT world, online at Essentialreit.com site: recommended for keeping uptodate.Read more ›
What would be nice is to carry this concept through its logical conclusion, and demonstrate how to get the data on the internet to measure a REIT's ability to maintain and continue to grow its dividend going forward, with practical examples of how to pull numbers off of a REIT's 10Q and 10K annual earnings reports, calculate FFO and AFFO and Fixed Cost Coverage Ratios.
I hope he follows up with a book that will take us to this next step.
Most Recent Customer Reviews
I came across the first edition of this book in my local library (along with Mullaney's book on REITs). Read morePublished on April 5, 2007 by Gregory McMahan
In over 400 pages, the author makes the case that real estate,
as marketed through REIT vehicles, makes enormous sense, from
an investment point of view. Read more
The book is an easy to understand introduction.
Yes, Quality REITs can be a very good addition to one's portfolio as the book states. Read more
This book thoroughly reviews the many aspects of REITs in a clear, interesting and informative manner. Good information. Good writing. Very helpful.Published on March 14, 2003
I liked the previous version of this book but the new 2002 edition is much better. I feel that I learned a lot more about REITs from reading it. Read morePublished on October 28, 2002