REIT or office

G

galway_blow_in

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So it appears I'll probably just settle for some compensation re_ the house I was buying in Limerick and which the vendor signed contracts for, his solicitor now appears to want to settle this himself as he probably knows he messed up

Anyway I have come across an office with a tenant who entered into a ten year lease at end of 2019 ,same purchase price as house I was buying and also in Limerick

Yield is 6.5% , no vat on purchase and my 6.5% takes into account my solicitor and 7.5% stamp duty cost

I am currently however collecting 4.5% on the only Irish commercial property REIT, I could put the funds designed for the house which looks like a total nightmare into this much more diversified REIT instead of the office

My gut tells me 4.5% on a REIT is better than 6.5% on a straight commercial buy but government meddling with residential REIT,s perhaps could end up spooking the entire REIT sector?

Opinions welcome folks

Thanks in advance
 
REITS are constantly trading at below their NAV. Green REIT sold out because of it. The share price of some of the other REITs are not performing very well either. Yes, you get diversification but the stock price doesn't perform and you are also subject to stock market volatility as well as property volatility.
 
Steven Barrett said:
REITS are constantly trading at below their NAV. Green REIT sold out because of it. The share price of some of the other REITs are not performing very well either. Yes, you get diversification but the stock price doesn't perform and you are also subject to stock market volatility as well as property volatility.
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All true , I'm leaning towards the REIT option and I bought the commercial one a while back at a lower price so 10% in the Green

The tenant in the office appears to be very solid but with remote working so increasingly popular, you run risk of a vacant property
 
Steven Barrett said:
Your compensation. You posted as if your choice is between a property or a REIT. Why don't you just take cash and invest in something else?
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Like ?

I had agreed to buy this house last November for 161k and had planned to lease to council, unfortunately the residential market in Limerick is up about 8% since and that's no exaggeration, not much approaching value which is why commercial seems better value ?

Il probably just add to my REITs ,both residential and commercial, you obviously have diversification but government meddling spooking foreign investors is a growing concern
 
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