"Picking the Sweet Spot in Real Estate"

"Picking the Sweet Spot in Real Estate"

This article is found in Money Feb 2010.

The article discusses investing in real-estate. Although real estate investment trusts (REITs) as an asset class have doubled in price since March of 2009, portfolio diversification and income can be achieved by small and judicious investments in REITs. Simon Property Group and Boston Properties are among REITs investors may find attractive.

FIRST THE HOUSING market tanked, eventually sending home prices down 30% from their 2006 peak. Then came warnings that commercial real estate would be the next shoe to drop--and that the problems could dwarf those in the residential market. Lately the signs of distress have become starkly visible: Prices of commercial property such as apartment buildings, malls, and offices have fallen more than 40% over the past two years. Rents are down, and vacancies are at their highest levels in more than two decades. Meanwhile, the number of distressed-property sales is expected to rise over the next few years, keeping pressure on prices.

If you're the adventurous type, that may have you wondering whether this is a good time to add real estate securities to your portfolio. After all, wise investors look for buying opportunities in troubled markets, moving in when the herd is running scared.

Tips shared include:
Stake a small claim for now
Focus on the cash kings
Go for active management
Minimize the tax bite


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