Real estate adds diversification, but how should you invest?
Thursday, 6 Oct 2016 | Ilana Polyak | CNBC
By all measures, the real estate sector, along with the rest of the economy, is roaring again. Just look at median home prices of existing homes. In July they were $244,100, a 5.3 percent rise from the same period a year before, according to the National Association of Realtors.
That, plus historically low interest rates, has made investors take notice.
“I used to have people say, ‘I need a 6 percent yield on my investments to retire,'” said Michael Berry, a certified financial planner and CPA based in Seattle. “I don’t know where you’re going to find it these days, except in real estate.”
Indeed, the average yield of stocks in the Standard & Poor’s 500 index is 2.29 percent, and the 10-year Treasury note yields just 1.69 percent. But real estate can yield more than that, while also adding important diversification to a portfolio.
Blue Vault is just what advisors need to size up the different offerings in the nontraded REIT market. Just as importantly, it’s what the industry needs to encourage best practices among REITs.