Real (estate) income: A haven from volatility

Clients want returns, yet fixed-income isn’t delivering, and many are frightened of equities. Many advisors, as a result, are turning to real estate to round out portfolios.

Doing that, however, requires deep understanding of a client’s tax picture, income needs, time horizon and the future needs of their heirs. Real estate’s a great income provider, but requires some work to know for certain whether the investment is suitable. Generally, long-term investors are better suited to this asset class.

This month’s special report weighs the opportunities and risks, to help you offer the best options to your clients.

Get property ownership right, or pay too much tax

Whether it’s a co-ownership of a family cottage with a sibling, or of an urban rental property, the legal structure of the ownership agreement plays a key role in determining tax implications.

REITs offer long-term stability

Real estate investment trusts (REITs) are an investment anomaly, especially for anyone accustomed to following corporate earnings: REITs generate poor return on equity. On the flipside, tax treatment of the trust distributions can be useful.

Wood you buy this investment

Have your clients considered investing in timberland? If your answer’s no, that’s not a surprise. Most investors are unaware of the asset class, which involves investing in either tree farms or managed natural forests.

The pros of private real estate

Private real estate can be suitable for clients looking to offset the volatility of stock markets. But as an asset class, it’s not without risk, and it is governed by a complex set of rules.

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Commercial mortgage fund built on yield

Even Canada’s big banks say it is a good time for companies to be in the commercial loan business

Seeking yield? Think real estate

As an alternative asset class, which represents a third of the world’s wealth, real estate generally—and commercial real estate specifically—provides an inflation hedge and reliable cash flow.

Real estate: Gimme (inflation) shelter

It’s a reliable hedge to inflation because rents generally rise with inflation. But not all real estate property, and not all real estate investment products, hedge inflation well.

Real estate smooths portfolio volatility

For many institutional portfolio managers, real estate is a core holding rooted firmly in the fixed income side of the asset mix.

How to position real estate in the portfolio

When determining how much real estate investment should be included in the equity portion of a client’s mix, keep the portfolio simple.

Ain’t nothin’ like the real thing

Institutional real estate investors know that REITs are far too closely correlated to the equity markets on which they are listed. For these managers, nothing beats the real thing: a portfolio of physical real estate holdings.