In early March, I had an idea for an experiment I wanted to try with Real Estate Investment Trusts (REITs). I wanted to test out how a selection of REITs in the stock market would perform compared to the investments in my Fundrise account. My plan for this idea was laid out in my previous post “REITs in the Stock Market Versus REITs in Fundrise.”
If you prefer to watch the video version of the information in this post, check it out below. The video also includes a short tutorial on adding funds to a Fundrise account.
My idea has been to spend about $50 to $100 every month or two on investments. Some of the REITs trading in the stock market have price charts that look like sine waves, oscillating up and down every few weeks, so I try to buy REITs when it looks like we are in a valley. Then I deposit an equivalent amount of money into my Fundrise account. The total amount of money I am investing isn’t a lot, but I wanted to show how an investment account can be built up from the equivalent cost of a family dinner at a restaurant or a trip to the movies (remember when we used to go out to restaurants and movies?).
I added shares in two of my residential REIT positions in my E*Trade account in early August. I picked these two companies because I feel that they make similar project choices to those of Fundrise. Both of the share prices were lower than when I originally bought them, so I was able to lower my cost basis.
On August 3, I bought one share of Camden Property Trust (CPT) for $88.20. Camden Property Trust handles the ownership, management, development, acquisition, and construction of multifamily apartment communities. Currently their price to FFO is at 18.09 and their dividend yield is at 3.78%.
The other REIT I invested in was the Apartment Investment and Management Company (AIV). They own and manage quality apartment communities in diverse geographical locations within the United States. I bought two shares of AIV at $36.25. The price to FFO for AIV is 14.41 and the dividend yield is at 4.55%
The total amount spent for these two purchases was $160.70. Prices for the REITs I own in my E*Trade account are already creeping lower than they were three weeks ago, so it is likely I will be making another purchase soon. I may set up some lower priced limit orders and see if they hit in the next few weeks.
Moving from E*Trade to Fundrise, I am currently invested in 13 eREITs through Fundrise. This time I let Fundrise decide how to allocate the funds among the eREITs in my account when I deposited the $160. While I was making my deposit, Fundrise selected four eREITs to divide my money into. Here is how it was broken down.
- I had $16.41 deposited in the Income eREIT. This investment now makes up 7.5% of my Fundrise portfolio. This eREIT is in the operating stage with 16 projects, mostly located in California and Florida. It’s year to date net return is 4.7%.
- Next is the Income eREIT V, which is in the ramping up stage and has only one project, an apartment development in Atlanta, GA. There isn’t much to write home about for returns yet. It now makes up 4.1% of my portfolio after $19.83 was invested in it this month.
- Now for the largest position I own in Fundrise, the Growth eREIT II, which is currently in the stabilizing level. With the addition of $46.29, this eREIT now accounts for 25.2% of my portfolio. This eREIT consists of 12 projects, with half in Los Angeles and the others in Florida, Georgia, Maryland, North Carolina, and Tennessee. The year to date net return is at 1.9%, though last year was better at 5.9%.
- A good portion of my deposit, $77.47, went into the East Coast eREIT, which is 18.4% of my Fundrise portfolio. This eREIT has 15 active projects in various East Coast states. It is in the operating phase and has the best 2020 year to date returns of the four eREITs I’ve mentioned, at 4.8%. For comparison, in 2019 the net return was a solid 13.6%.
I noted the total value of both my E*Trade and Fundrise accounts after the market closed on Friday, August 14, 2020. The total amount invested in my E*Trade account was $1,481.85. This account has stayed pretty flat since my June update, apart from the money I have added into it.
Fundrise is faring a little bit better, showing a small amount of appreciation. The total amount invested in my Fundrise account was $1,585.24. My Fundrise account is currently up by $103.39 over my E*Trade account.
If you are looking for short term, quick gains, you are not going to find it easily in REITs. If you are looking for a way to diversify your portfolio and earn steady, solid dividends to supplement your income, you might consider investing in REITs for the long term. Please do your own research before committing to any investment and consider your personal circumstances, financial goals, and timeline, particularly if you are thinking of investing in REITs right now.
Disclosure:Information shared on Squintillions is based on the author’s own experiences, thought processes, and research and is not intended as professional advice. Please do your own research before committing to any investment! If you feel your personal challenges are beyond the scope of my suggestions or other self-help materials, please seek professional counseling. Further, there are some affiliate links and ads used in this website. If you purchase an item when following these links, I may receive a commission on your purchase.