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Mid-America Apartment Communities Inc. Message Board

  • merryledel merryledel Feb 8, 2003 8:14 AM Flag

    Where would REIT investors go?

    I for one am out of REITs for now. I've put some cash into Preferreds (eg Royal Bank of Scotland) which is yielding 7%. That money is in my IRA so I don't care about tax issues. I've also bought some closed-end muni funds for taxable accounts. I just don't like the look of the stock price trends on REITs. I like MAA, and used to own it. I just don't feel like a recovery is in store soon for wage-earners who are MAA tenants and occupancy will continue to be a problem. I am thinking about holding Public Storage, however. Got to store that stuff when you've moved back in with mom!

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    • Please note that the balance sheets of most REIT's are stronger than ever. Sure, low interest rates have made single-family homes more afforanle. But REIT's have also been taking advantage of these lower rates, and re-financing accordingly. This is a major positive in the long haul.

      I treat my REIT holdings like pseudo bonds. Like bondholders who invest for interest income, I buy REIT's for the dividend income. So, normal stock volatility does not bother me. I would sell ONLY if something happened that jeopardized the dividend.

      Could I have made more money over the years trading REIT's. Probably. But I am not a good market timer. Few people are. Again, as long as the company pays me the dividend that attracted me in the first place, then I am a happy camper. In fact, all of my REIT's have increased their dividends since I bought them.

    • Did you read the fairly recent Barron's cover story on demographics and the outlook for apartments? That convinced me that the intermediate and long-term view is strong, and residential real estate is a core holding...and, so why not enjoy the almost 10% yield in the meantime?
      And the assets here are worth $26-29 a share.
      Hey, the slowdown is good for the industry. Will bring supply and demand in balance.
      If we were in boom economy, with overbuilding pressures, that would worry me more.

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