Author Topic: Vanguard REIT's  (Read 2372 times)

brotatochip

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Vanguard REIT's
« on: July 05, 2016, 06:38:47 PM »
I wanted to further diversity my personal investments and get into a Vanguard REIT mutual fund and contribute monthly.  Is the market a little too hot right now in real estate?  I would appreciate some mustachian insight please.

mrpercentage

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Re: Vanguard REIT's
« Reply #1 on: July 05, 2016, 06:44:35 PM »
I wanted to further diversity my personal investments and get into a Vanguard REIT mutual fund and contribute monthly.  Is the market a little too hot right now in real estate?  I would appreciate some mustachian insight please.

Many REITs are interst rate sensitive. So if rates rise they will suffer. However they pay big dividends and if you are investing monthly (not dropping in say a years salary at once) then I say go for it man. No one can tell you what will happen the next ten years

brotatochip

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Re: Vanguard REIT's
« Reply #2 on: July 05, 2016, 06:50:02 PM »
I wanted to further diversity my personal investments and get into a Vanguard REIT mutual fund and contribute monthly.  Is the market a little too hot right now in real estate?  I would appreciate some mustachian insight please.

Many REITs are interst rate sensitive. So if rates rise they will suffer. However they pay big dividends and if you are investing monthly (not dropping in say a years salary at once) then I say go for it man. No one can tell you what will happen the next ten years

Thanks my fellow mustache!  I would not touch this fund for many years and have been itching to get into real estate. 

GrOW

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Re: Vanguard REIT's
« Reply #3 on: July 05, 2016, 07:08:10 PM »
Take a quick look reit tax implications as well. May not matter to you or may throw you over an important threshold.

brotatochip

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Re: Vanguard REIT's
« Reply #4 on: July 05, 2016, 07:22:16 PM »
Take a quick look reit tax implications as well. May not matter to you or may throw you over an important threshold.

I didn't even think about this, thank you!  I was thinking of opening up a Roth, buying shares of the REIT mutual fund and maxing this out every year.  I already max my 401k and have plenty of personal investments but lack a ROTH (not sure if facepunch needed).  Would a ROTH help with taxes? 

mrpercentage

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Re: Vanguard REIT's
« Reply #5 on: July 05, 2016, 08:15:36 PM »
Take a quick look reit tax implications as well. May not matter to you or may throw you over an important threshold.

I didn't even think about this, thank you!  I was thinking of opening up a Roth, buying shares of the REIT mutual fund and maxing this out every year.  I already max my 401k and have plenty of personal investments but lack a ROTH (not sure if facepunch needed).  Would a ROTH help with taxes?

Very much so.

seattlecyclone

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Re: Vanguard REIT's
« Reply #6 on: July 05, 2016, 08:21:05 PM »
REIT dividends often don't qualify for the lower "qualified dividend" tax rates when held in a taxable account, so you would be paying your full marginal rate on these. If you're going to own REITs, a retirement account is a great place to do it from a tax-efficiency perspective.

tonysemail

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Re: Vanguard REIT's
« Reply #7 on: July 05, 2016, 08:25:05 PM »
yeah, i'm not willing to own REITs outside of my roth IRA.

If you're holding REITs for the purposes of diversification and asset allocation, then it shouldn't matter if the asset class is over priced.