The REIT Special - An Inflation Hedge
A REIT, or real estate investment trust, is a company that owns, operates, or finances income-producing real estate assets. Think of REITs as mutual funds for real estate. REITs pool the capital of numerous investors.
The most important factors to focus on when researching multifamily REITs are affordability, population growth, and job growth. For example, large cities such as New York and LA have higher living costs and more renters. But their job growth and population growth are severely lagging right now. You want large urban centers that show strong in-migration trends and job growth.
Consider the multifamily market in the Sunbelt and Mountain region. Even before COVID, there was a migration boom and significant employment growth, especially in the Sunbelt region. Plus, this region didn’t lock down as strictly as big cities like New York and LA and saw fewer job losses during the pandemic.
The Mountain region is also seeing a rapidly growing population, a strong quality-of-life, and affordable living costs. Do you know the ONLY state that saw year-over-year job growth for total nonfarm payrolls in January 2021 while also leading in year-to-date growth? Idaho .
1. Research individual REITs with the most exposure to growing regions.
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