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How do I Choose the Best Canadian REITs?

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  • Written By: A. Leverkuhn
  • Edited By: Andrew Jones
  • Last Modified Date: 14 November 2016
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Finding the best Canadian REITs involves considering not only how these financial products are structured, but also understanding the nature of the regional and national real estate market, which you could call the “geographical context” of the funds. Canadian REITs are Canada’s version of a specific kind of real estate investment products that are appealing to investors all over the world. Tools like the real estate investment trust, or REIT, make it possible for more complicated real estate transactions to take place across national boundaries.

The REIT is set up in specific ways to make sure that it is primarily a real estate investment. In the U.S. the REIT is required by law to distribute the majority of its income as dividends to shareholders. REITs are often managed in order to produce desired yields or gains for investors. Potential gain is one aspect that investors think about when they are choosing Canadian REITs; they balance the projected gain against fees and expenses, including an “expense ratio” that shows how much it costs to invest in the REIT. They also evaluate other restrictions like a minimum contribution.

In order to choose the best Canadian REITs, investors should do research in particular Canadian real estate markets. It helps to know about how Canadian rules on property operations real estate acquisition might affect these funds. In some quarters, Canadian REITs are known for their potentially lucrative retail real estate holdings.

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It’s important to note that although an REIT must invest in real estate in some form, the reality is that Canadian REITs, like others in other countries, can be extremely diverse. Some of these financial products focus only on acquiring and operating properties, such as the business of expanding a collection of rental properties and managing them for profit. Other REITs get into buying mortgage debt and mortgage-based securities, as well as making complicated loan interest transactions to boost gains. The underlying strategy of leadership for these Canada national REITs will make a big difference in the final result.

Investors may also want to do their homework on access to Canadian REITs. This means knowing all of the national rules on financial transactions, and what protections are in place for investors in Canada. Some REITs are exchanged, where intraday trading is possible, and others are set up for more restricted access. Different REITs may have a different end tax burden for the investor, especially depending on their home country. All of this is part of the research that investors do to choose the best Canadian REITs.

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anon337846
Post 2

Your readers may be interested to know that League Assets, a private Canada REIT, has suspended all distributions and redemptions effective June, 2012.

anon189814
Post 1

Great article. Your readers may be interested to know that League Assets, a private Canada REIT, is also planning one of the largest commercial real estate projects in Canada. Thanks. --J

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