Property Investment: Unit Linked fund v REIT

D

Dublin32

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Hi all,

Hoping to get some advice here. My father has a sum of cash to invest. He has a portfolio of residental properties plus investments in normal managed equity/property CISs (no distributions).

He doesnt need or want the annual distributions that REITS have to make. As he will be subject to income tax on these distributions. Would an investment in a property unit linked fund be a better option, that reinvestments its income. He has large rental losses forward to offset rental income, so near nil liability.

He wants to invest in property either directly or indirectly.

Am i wrong in basing my decision purely on income tax liability.

Many thanks.
 
REITS are expensive and some fund managers stay well away from them as they believe the don't represent value for money. They are very liquid though. Unit linked, he can get locked in for 6 months in a falling market and not be able to move his money out.

I wouldn't touch either to be honest.

He should really diversify his investments and put money in shares and bonds too.

Steven
www.bluewaterfp.ie
 
Thanks Steven, he has 50% of his investments in shares and bonds through well known managed funds. Invested in 2006 and still approx 5% down across the funds.

Yeah I was thinking of the liquidity issues too with a property unit trust.

Will keep looking.
 
SBarrett said:
Even though he bought when prices were nearing their height, he should have made his money back by now. Which well known managed funds did he invest in?

Steven
www.bluewaterfp.ie
Click to expand...
BOI Smart funds, Evergreen Fund S9 and Trilogy II S9, up about 16% on Evergreen and down 20% on Trilogy if i can recall correctly.
 
Your dad sure likes his property! ;)

Trilogy's problem was the gearing on the property element, really screwed things up when things went south. Then you had Bloxham suing Merrill Lynch (I think) when the bonds they were sold turned out to be worthless. What looked like a good fund turned into a disaster.

The Evergreen fund has a high property content to it (in case you weren't aware). It has been around since the 70's and was promoted as having never had a negative return over a 5 year investment period. Then the credit crunch recession hit and they couldn't make that claim anymore.

Steven
www.bluewaterfp.ie
 
He does like his property. I was trying to convince him to diversify, even if only equities/bonds. He doesn't trust anything other than property. He owns a few, now he has surplus cash he wants to buy another property:eek:
 
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