Real Estate

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I just read your value suggestion, GRT.UN. In the family portfolio, I target 20% income, 40% balance or core and 40% growth. But minimize real estate investments as we have a home in Toronto and a cottage in Muskoka. (The value of these 2 properties is about 2 times greater than the market value of the family portfolio.) Do you agree with this approach or would you suggest a certain % of real estate in the family portfolio???….Tom

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Asked on April 14, 2024 3:39 pm
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Morning,

This is a great question. To a certain degree that makes sense. At the end of the day, actual property and REITs do tend to react a little differently, however if ever there was a big market crash like we saw in the US back in 08 - REITs and your property would be equally impacted. So with that in mind, limiting your REIT exposure because you own two properties does make some sense.

The major difference of course is liquidity and income - you can buy/sell REITs easily and they generate income. But the need for liquidity and income is very situationally dependent. I'd say REITs are more like owning rental properties.

Personally, I don't think there is anything wrong with your approach as there is logic and reasoning behind it even though it is not an apples-to-apples comparison. That is my personal view on it and I'm sure this would be a topic that would get a wide variety of answers from folks.

Mat

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Posted by Mathieu Litalien
Answered on April 15, 2024 5:05 am
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