Share




Real Estate Investment Trust | Is REITs a Dependable Retirement Income for Physicians Instead of ETF?


August 4, 2020

Catherine Burke


“The major fortunes in America have been made in Land.” –John D. Rockefeller

 

Real Estate Investment Trust | Is REITs a Dependable Retirement Income for Physicians Instead of ETF? It is truly said by the businessman-cum-philanthropist Mr. John D. Rockefeller that land can make a fortune for all the American citizens. However, if you look through the perspective of a physician, the REITs investment, or Real Estate Investment Trusts and ETF stocks or Exchange Traded Funds stocks both will offer you lucrative ways to earn passive income in the post-retirement period. 

There is also the REIT ETF available in the market. You as a physician-investor can enjoy both the REIT or Real Estate Investment Trust and ETF in one go.  

In this article, the intention is to let you choose what you think will be your ideal retirement income, REIT, or ETF?

 

As a physician, how much can you depend on ETFs?

In the debate between ETF and REIT, we should start with the ETF. The ETF stocks include a variety of assets such as stocks, bonds, real estate, and commodities.

Though some people cannot make the difference between an ETF and a mutual fund but remember both are not the same. If you take the example of an ETF, the ETF is in trade-business throughout the trading day but a mutual fund is evaluated on the net asset value at the end of the trading day.

Usually, the term ‘throughout’ and ‘at the end of the day’ makes the difference between an ETF or Exchange-traded fund and a mutual fund.

 

What are the positive aspects of an ETF?

Now, come to the primary point. There is a group of financial veterans who prefer ETF over Real Estate Investment Trust for the physicians. According to them, with an ETF you can customize your investment as per your risk-taking capability. This customize technique is not always possible with REITs.

That is why, the quantity of liquidity is comparably high on an ETF; barring public-listed REIT, you cannot always get that much liquidity in a non-listed Real Estate Investment Trust.

 

Are there any negative points you can find in an ETF?

With the positive points, you can find some negative things in ETFs too. Sometimes, you may feel ETFs are too rigid and need to be a little bit more diversified. Apart from it, earning a dividend from ETFs is not always an easy task.

First of all, you need to find solid and stable companies that have the capability of paying dividends regularly at least quarterly. 

With the positive points, you need to remember these negative points too that are attached to the ETF.  

 

Now, take a look at the REIT as retirement income for physicians?

Hope you have understood about ETF. Now, take a look at how effective REIT is as a retirement income for physicians. Real Estate Investment Trust usually own or finance real estate that is usually income generated properties.   

 

Take a look at 5 reasons why Real Estate Investment Trust (REIT) can be your favorite income-earning way more than ETF?

  • With REIT, you can expect to get high and healthy dividends. REIT is obliged to pay 90% of its income as a dividend to the shareholder.
  • The protection level of REIT is praisable. The REIT is tightly scrutinized by auditors, independent directors, financial analysts, and business media editors. That is why Real Estate Investment Trust is considered a safe and secure way of investment. 
  • Financial analysts praise the REITs to invest in as an ideal investment for physicians in the long term.
    • “Don’t wait to buy real estate. Buy real estate and wait.”–Will Rogers
  • If you are eager to get a lump sum after retiring as a physician then you have to believe in REITs to invest in. As you have read in the earlier point that REIT is an ideal investment in the long term.
  • Real Estate Investment Trust will give you several varieties for investment purposes. For example, there are retail, healthcare, mortgage, residential, and office.
    • So, investment in REIT is a secured investment.

 

The 3 serious reasons you should take care of Real Estate Investment Trust before you make an investment 

Remember, not everything is good about REITs investment. You should take care of 3 matters that you may consider negative about REIT.

 

A. Not all REITs provide you a high-yielding 90% dividend

The majority of Real Estate Investment Trusts who are going to provide you a high-yielding 90% dividend are usually public-listed. There is less chance of getting a high-yielding dividend with private-listed REITs or the non-listed REITs.

B.  Growth and liquidity cannot always match upto your expectations

In REIT, sometimes it is 2 different worlds altogether. One is public-listed REITs to invest in and the other is non-listed and private-listed REITs.

With public-listed REITs to invest in, you can expect to get high growth and liquidity in the form of high-dividends.

But for private-Real Estate Investment Trust, do not expect to get such benefits and advantages all the time.

C. The tax rate is pretty higher

Another serious allegation over REIT is that it falls in the higher tax bracket if you are going to compare it with stock-dividends, ETF stocks, and other assets.

These are the 3 negative points you should analyze before going to invest in REITs.

 

Despite these negative points why should you opt for REITs to invest in?

  • “Retirees should look for REITs that invest in commercial buildings that have mainly AAA tenants or big companies.” –Mike Ser, cofounder of Ser Man Traders
  • You may google it or ask personally to any financial veterans; the majority of them will answer you that you should buy REITs for ‘diversification’ and ‘liquidity.’
  • It is a far better idea than buying a rental property.
  • With REITs to invest in, you can buy a small portion of many properties.
  • There is no problem with listed-REITs on liquidity. You can quickly sell your holdings on REIT if you need money immediately for any reason.      
  • With high dividends (90%); you can safely rely on REITs as a physician, for your post-retirement income over ETF stocks.

 

However, do you want the best of Real Estate Investment Trust & ETF? A REIT ETF may be the solution for you

  • After reading the article till now, have you liked both the REIT and ETF? And you cannot decide where you should invest?
  • Look at REIT ETF. The Exchange Traded Fund which is for exclusive REITs investment.
  • FRI, an initiative of the S&P REIT index fund, is the perfect example of REIT ETF. 
  • With REIT ETF, you can get the best of both REIT and ETF.

 

Real Estate Investment Trusts (REITs) & Debts: The 2 important angles of your retirement-savings

If you are interested in REIT for your retirement savings then you must look after your debts too. Debts are your other barrier for retirement-purpose savings. 

So, likewise you may take experts’ help to get valuable information related to REITs to invest in; there are also consultant firms available in the market to help you to solve your loan problem like the pdl. 

The debt consultant firms can help you with valuable tips on how to solve your pdl loan problem with more than 300% interest rates. As you have read earlier, debts are never good for your retirement savings. Along with the expert firm, you can self-help with a settlement loan calculator on your pdl debts.

 

What else?

Think from the core of your heart. As a physician you may get more advantage with REIT as no other asset will give you such a high-yielding 90% dividend.

The statistics are also in favor of REIT stocks. REIT data says 87 million Americans own REIT stocks. So, the balance is slightly bent over REITs investment than on ETF stocks.  

Now the choice is yours.

 

Real Estate Investment Trust


Author Bio: Catherine Burke is a financial writer for online payday loan consolidation. She provides information on successful cash loans and payday loan consolidation to help people get over a difficult patch. She lives in Kansas and has earned a frame in the matter of payday loans.


 

Here at PhysicianEstate, we welcome all physician entrepreneurs to learn about commercial real estate investments, rental property investments, and wealth generation. We encourage all physicians to eventually become real estate physician investors. We know a great deal about Who – What – Why – How. 

Stay in touch with us by signing up for our newsletter. The newsletter will keep you up to speed on the current real estate investments we are looking at, provide physicians with investment opportunities, and much more.  

Legal Disclaimer: This is not investment advice. I am not a legal and/or investment advisor. This is my personal blog, and all information found here, including any ideas, opinions, views, predictions, forecasts, commentaries, suggestions, or stock picks, expressed or implied herein, are for informational, entertainment or educational purposes only and should not be construed as personal investment advice. These are my views, it is not a production of my employer, nor is it affiliated with any broker/dealer or registered investment advisor. While the information provided is believed to be accurate, it may include errors or inaccuracies. To the maximum extent permitted by law, PhysicianEstate disclaims any and all liability in the event any information, commentary, analysis, opinions, advice and/or recommendations prove to be inaccurate, incomplete or unreliable, or result in any investment or other losses. You should consult with an attorney or other professional to determine what may be best for your individual needs. Your use of the information on the website or materials linked from the Web is at your own risk. 

Don't forget to share this post! Sharing is caring.


Authored by Harsha Moole, M.D., MBBS

Hey there! I hope you enjoyed reading this blog. PhysicianEstate is my brain child and passion project. I run this platform to empower entrepreneurially motivated physicians to make financially educated investment decisions and discuss asset protection strategies. Lots of important but free content here and here! If you have any questions or if you are interested in partnering with me, let’s connect! hmoole@physicianestate.com

No Comments

Comment

Comment as guest

Subscribe to Our Newsletter