This strategy is eligible for registered accounts like TFSA, RRSPs, and RRIFs. You can of course hold it in a non-registered account or a corporate account.
The advantages of a private REIT include:
- The flexibility to purchase and manage assets with a longer-term view than a public REIT.
- Participation through construction, which can provide a higher yield.
- Participation through the purchase of properties requiring improvement, which may provide increasing revenues.
- More stable ongoing unit prices, as private REIT unit prices are based on actual valuations of the investment property portfolio rather than the stock market
- More stable ongoing unit prices, as private REIT unit prices are based on actual valuations of the investment property portfolio rather than the stock market
- Tax-efficient distributions to investors (these have historically been classified as capital gains and return of capital rather than income)
The disadvantages of a private REIT include:
- Larger minimum investments than equities: the minimum investment for our Residential Real Estate Strategy is $25,000.
- Liquidity: Public REITs can be traded at anytime, whereas private REITS generally have minimum initial hold periods (such as four months) as well as a notice period for unit redemptions (such as 30-60 days).
For investors with positive equity in their primary residence, you may want to consider investing using funds from a Home Equity Line of Credit – interest may be tax-deductible. If you are interested in exploring this opportunity further, please complete the following form:
