SILVER: Investing in real estate without owning property with REITs

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Many investors are looking for ways to invest in real estate without having to deal with the responsibilities of direct property ownership. One popular and practical alternative is investing in Real Estate Investment Trusts (REITs).

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REITs pool funds from many investors to buy, manage, and finance income-producing real estate. They offer the advantage of real estate investment without the hassles of property maintenance, tenant management, and other landlord duties.

Why REITs are attractive

Investing in REITs provides several key benefits. They typically offer monthly distributions, making them appealing for investors seeking regular income. Additionally, REITs generally don’t move in lockstep with the stock market, making them a great option for portfolio diversification. Unlike buying physical real estate, you can easily buy and sell REIT units through investment accounts, simplifying the process.

Spotlight on Centurion Apartment REIT

A great example of a reliable REIT is the Centurion Apartment Real Estate Investment Trust. Since its inception in August 2009, the Centurion REIT has never experienced a negative calendar year, showcasing remarkable stability.

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The fund focuses mainly on apartment buildings and student housing across Canada and the United States. It also holds investments in mortgage and equity real estate developments. Currently managing approximately $7.7 billion in assets, Centurion REIT offers impressive returns, averaging an annualized 12.5% since inception.

The Centurion Apartment REIT has consistently demonstrated strong performance. In 2024, it returned 9.07%, and in the previous years, it achieved 6.52% in 2023, 13.89% in 2022, 11.27% in 2021, and 7.93% in 2020. This steady performance demonstrates Centurion’s ability to generate consistent results despite economic fluctuations.

Diversification and stability

Because REIT returns are influenced by real estate values and rental income rather than stock market swings, they can reduce the overall volatility of an investment portfolio. Centurion Apartment REIT, for example, prides itself on rational pricing with lower volatility, providing a stable investment that doesn’t typically fluctuate dramatically.

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How to invest

Centurion Apartment REIT is available for investment through registered plans such as RRSPs, RRIFs, and TFSAs, with a minimum initial investment of $25,000. It’s important to discuss with a financial advisor to ensure that this investment aligns with your financial goals.

Consistent returns without market volatility

For investors looking for consistent returns, monthly income, and an investment not heavily influenced by stock market volatility, REITs — particularly the Centurion Apartment REIT — are worth considering. Always discuss your investment options with a trusted financial advisor to see how REITs could fit into your broader investment strategy.

— Michael Silver, B.Comm. (Hons), CFP, CHS, Managing Partner — W.P.G. The Wealth Planning Group, and a guest writer for the Winnipeg Sun.

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