Post 4 - Investing in real estate through the capital market
Many real estate investors are abandoning the capital market as a worthy alternative.
Why? I really have no idea, maybe due to the stigma that the capital market is a casino, only losers and other things that one usually says when you don't really know data in depth.
True, the capital market may be volatile, see these days, but forget about it after about 10 years of increases.
A big advantage of the real estate capital market is that it is possible to enter in very small amounts.
What is low? Thousands of shekels.
A huge spread can be achieved between sectors, countries, currencies and all without having to seek investment, report to the authorities and be in suspense as to what will happen and how the management company or entrepreneur will succeed.
Like any investment, the capital market also needs to know what to do, what the time span of the investment is and what its goals are.
All of the above came to give information and ideas as a study material, not as an investment recommendation.
I will very briefly discuss the investment options in the capital market in the real estate industry.
Shares / direct bonds of real estate companies
There are dozens of traded companies, you can buy directly any company that interests us and trusts it in Israel or abroad.
Buying one share is like buying a single - the whole prospect and risk on the company. You can buy some stocks from different companies, and then it's like Multi Single - we sprinkled some risk.
You have to pay attention to what you buy, according to the field we have decided that suits us: an entrepreneurial, profitable company that operates only in Israel, only abroad, etc.
Stock index
Here I will refer to the stock market indices in Israel, but in each country there are solutions of indices.
· General Real Estate Index, individual company weight will be up to 3%
· Tel Aviv Construction Index (new from 9/2/20) - Entrepreneurial companies in Israel. One company weight ceiling 5%
· Tel Aviv Yield Israel Index (New from 9/2/20) - Yielding Real Estate Companies in Israel. One Company Weight Ceiling 5%
Tel Aviv Yield Index Abroad (New from 9/2/20) - Israeli Yield Real Estate Companies Operating Abroad. One Company Weight Ceiling 10%
Companies (REIT (REAL ESTATE INVESTMENT TRUST
There are different tax laws for REIT companies in Israel and around the world from regular real estate companies.
Largely these are companies that own many assets, manage them and must distribute 90% of their profits as dividends.
They have regulatory oversight because of the relief they receive.
The largest company in the country is REIT 1, and there are still few traded.
The beauty of the United States is that there are companies in every sector: residential, medical, industrial, storage, etc. - and with low capital, it is possible to disperse in the entire real estate industry without owning a single property.
In conclusion, I have briefly reviewed here real estate investment options without owning properties directly or in groups.
Everything is done from your bank account or securities trading, and investors over time can see very good performance - double digits on an annual average.
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