Real estate investment funds (RITS) can be one of the most attractive profits. When things go well, they can present a real negative income from rented property.

Real estate investment funds often come with high profit distribution revenues as a result of limited growth possibilities. But with 8 % return, Ret regional (LSE: RGL) may provide the best in the worlds.

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One of the most important things with any work is the equation of supply and demand. Whether it is a program or real estate, this is the place where the ability to impose high fees on prices.

Many real estate investment funds – concept – focus on the sectors where the demand is strong. One of the most prominent examples in recent years has been warehouses and industrial distribution facilities.

On the contrary, regional Reet focuses on the other side of the equation. Office offices-specifically, high-quality class offices “-were not recently designed, but this means that the offer is weak.

Building offices in the UK is at the lowest level in 10 years, which means a favorable equation for the best assets. Regional Reet has a set of offices outside the M25.

growth

The current occupancy level of the regional Reet regional is just less than 80 %, which is low compared to other real estate investment funds. But this gives the company a clear room for future growth.

One of the reasons for the low occupancy level is that some of its properties are older and less attractive to tenants. But the company is currently seeking a strategy to get rid of some and invest in others.

In general, growth is a challenge in favor of real estate investment funds. The claim to distribute the money they generate to investors means that expansion must be funded through debt or stocks.

Thus, CAPEX regional CAPEX for the basic initiative may give it some unusual growth prospects. In addition to 8 % profit dividends, this may be an attractive proposal for investors.

Risk

One thing to note about regional Reet is that the company may practice some tenants in rental contracts recently. This is likely to cause the lease income in 2025.

In general, this was the result of companies ’move to larger places or transition. Therefore, although it is not perfect, it is part of the normal path of businesses that investors need to prepare for.

There is not much to do about it, but investors must make sure they get a good return enough to justify the underlying risks. And a major part of this is the profits.

According to the latest results, the 5P temporary profits per share is covered. Therefore, the company must be able to maintain the returns of its investor while looking to re -rent its evacuated buildings.

Negative income

I think investors looking for a negative income should search for real estate investment funds. But sometimes, it is not the best opportunities in the most obvious places.

Office sector is a good example. But the lack of grade properties A and the lack of new buildings makes it an interesting opportunity that investors may overlook.

At today’s prices, 1000 pounds buy 823 shares in regional Reet – which is enough to earn 80 pounds annually of profits. I think it is good to add diversification to a negative income portfolio.