Recently I talked to the President of a private reit based in Southern Ontario here. Being private, they are not listed on the TSX or NYSE, and therefore are not subject to the wild fluctuations of said markets. This reit's business model, in a nutshell, is based primarily throughout Ontario investing in rental apartments in secondary markets. That is to say, generally they look at cities like Barrie, Kitchener, Oshawa ect vs downtown Toronto, Hamilton ect. They buy up blocks of apartment buildings so that they keep the managerial fees to a minimum as they can hire a person/team to then run more than one ap't in a particular locale. They look for buildings with approx 95-96% rental capacity so they can go into the apartments which are vacant, then upgrade them to increase the value of the next rental. Annually, they pay out 8% with a monthly distribution which is in line with a couple of other private reit's I've looked at.
Have any of you guys/gals looked into private reit's as an investment possibility? thoughts?
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