The stone paper does not deal directly of the tenants, and to share the risk of unpaid or vacation.
to Be a landlord and manage yourself well, with an objective of returns in rental is not easy. Find a tenant (whether for living or for professional purposes – offices, shops), to protect themselves against possible unpaid, to participate in the meetings of co-ownership, etc, it is time-consuming. And one doesn’t necessarily have the fibre for it. Of course, nothing prevents delegating to a professional, change of contact person : no longer the tenant natural person, but… the professional screen. But this has a cost : management fees rental between 6 and 9 % excluding vat of the annual rent without charges. And it is still based on relationships to manage, with risks of dissatisfaction. Not so with the SCPI (real estate investment trusts), since this is the management company that takes care of the buildings and tenants. The investor is completely free of the management.
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risk-shared
Two events (which are not, by far, assumptions of school) are likely to seal a rental yield, even when it could seem very safe at the start. On the one hand, the vacancy, that is to say, the fact that the property does not find, or more, lessee. This happens mostly when the location of the property, which is fundamental, has not been well chosen (potential commercial or residential insufficient). On the other hand, the unpaid rent, which may result from either a poor choice of tenant, whether for the last of the multiple vagaries of the personal life (divorce, death, etc.) or professional (bad business, filing for bankruptcy…). To guard against these risks (guarantees solid such that one or more sureties, insurance) is always better than “cure” after the fact, through court proceedings and execution that can take years.
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In the context of a REIT, these events are by no means excluded, because the zero risk does not exist anywhere. But the big difference with the investment real estate directly; it is only on the great mass of property leased (whether for housing or for the exercise of a liberal profession or commercial), these risks are fully pooled.
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indeed, in this framework, the investor is not with the tenant in a report on a (owner, tenant), but in a report a on 1000 or often more, which completely changes the game. Very concretely, if a room is found vacant, or unpaid rent, it is painless for the investor, a local failure is arithmetically compensated by all other leases which do not create any problem. An argument of weight in favour of the stone paper.
How much does it cost ?
The SCPI is a mode of access to the commercial real estate (office, walls of shop) is generally more cost effective than rental housing, particularly due to lower expenses for the owner. And the ticket to entry is often lower than when it does not pass through a REIT to invest in this area. (If the number one goal is the tax exemption, the investor may prefer an SCPI Pinel.)
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For the subscription of the units, a commission of 8% to 12% is levied on the issue price. The cost of the rental management per se, they are of the order of 10 % of the amount of the rent. It is strongly recommended to consult in detail the annual report and the financial results of the REIT for the amount of all current expenses.