REIT advice

dcouponzzzz

Hi All,

So I'm starting saving this month from scratch and have looked into multiple different options. Currently I simply have a cash ISA, multiple esavings account and a regular saver. One option which appears quite attractive is REIT's.

I have absolutely no knowledge or experience with saving, so what do I need? If I need a stocks and shares ISA how/where do I set that up? How do I link this to a REIT and how do I choose a REIT suited to my circumstance (depositing 2-300 per month and being able to withdraw on short-is notice)? Where do I deposit/withdraw/check investment? Where do I check the performance of the REIT chosen?

It all seems a bit daunting when I don't know a single friend or family member who have ventured into this. If anyone has any links to beginners advice that would be excellent, as I'm unable to locate one.

Thanks,

Dave

Archi_Bald

REITs are investments, not savings. Investments are for money that you can hold for 7-10+ years.

You should read up about investments, and about the need to diversify, before you venture into it. There's a whole host of books and websites that are recommended on here, e.g. Smarter Investing by Time Hale, and monevator.com

Before you invest, you should have a readily accessible stack of emergency cash that's best held in high-interest earning current accounts (not in cash ISAs or e-savings). 6-12 months of living costs is probably the right sort of cash to keep.

As a priority, you should also pay off any debt before you start saving and investing.

AndyT678

dcouponzzzz wrote: »

Currently I simply have a cash ISA, multiple esavings account and a regular saver.

dcouponzzzz wrote: »

I have absolutely no knowledge or experience with saving

Sort of obvious from the poor choice of cash ISA / esavings. REITs are investments not savings and have the potential to lose capital.

dcouponzzzz wrote: »

One option which appears quite attractive is REIT's.

A fairly specialist thing not normally associated with novice investors. What specifically is attractive about them for you?

dcouponzzzz wrote: »

how do I choose a REIT suited to my circumstance (depositing 2-300 per month and being able to withdraw on short-is notice)?

What is your ultimate purpose here? Are you accumulating money for a house or your retirement or something else? If you want this money back in less than 5 - 10 years then there is probably nothing particularly suitable to your circumstances.

What's the APR on your £9.4k car finance? How many months of cash reserves do you currently have? Maybe look at these first...

xylophone

http://www.bpf.org.uk/what-reit

Some information above.

I hold a couple of these ( as income generators) in my ISA portfolio.

The distributions are usually in the form of an ordinary dividend and a PID - the PID is treated like interest for tax purposes so tax free within the ISA.

Remember that the capital value and income can fluctuate.

dunstonh

One option which appears quite attractive is REIT's.

Property investments typically form no more than around 15% of a diverse portfolio. REITs are generally higher risk than normal equities given their specialist focus.

So, you appear to be wanting to invest 100% into a specialist/niche area which is very high risk.

Effectively jumping in at the deep end of a shark invested pool without knowing how to swim. Not something that would appear to be suitable for you in other words.

dcouponzzzz

Archi_Bald wrote: »

REITs are investments, not savings. Investments are for money that you can hold for 7-10+ years.


You should read up about investments, and about the need to diversify, before you venture into it. There's a whole host of books and websites that are recommended on here, e.g. Smarter Investing by Time Hale, and monevator.com



Before you invest, you should have a readily accessible stack of emergency cash that's best held in high-interest earning current accounts (not in cash ISAs or e-savings). 6-12 months of living costs is probably the right sort of cash to keep.



As a priority, you should also pay off any debt before you start saving and investing.

Thanks Archi, apologies I used the wrong terminology, I meant to invest rather than to save.

AndyT678 wrote: »

Sort of obvious from the poor choice of cash ISA / esavings. REITs are investments not savings and have the potential to lose capital.







A fairly specialist thing not normally associated with novice investors. What specifically is attractive about them for you?







What is your ultimate purpose here? Are you accumulating money for a house or your retirement or something else? If you want this money back in less than 5 - 10 years then there is probably nothing particularly suitable to your circumstances.



What's the APR on your £9.4k car finance? How many months of cash reserves do you currently have? Maybe look at these first...

I did point out that I haven't got a clue what I'm doing so thanks for reiterating that!

My ultimate purpose is to have an emergency cushion, be able to save for big purchases/holidays, and to build an investment portfolio from multiple sources to contribute to retirement in approximately 15 years. REIT's seem to be an investment of medium risk with decent potential gains (5-9%?) from what I've read and I'm currently adding 17% to a Friendslife pension invested in property through Blackrock (medium risk).

- 9.4k is the total including interest to be paid over the next 34 months, APR is around 5% and unfortunately overpayments are held as credit rather than contributing to reducing the amount owed.
- I have student loans which began in 2009, the terms and amount of which I'm completely unfamiliar with and am currently requesting this information.
- My mortgage is approximately 54k at 4% fixed until 2017 and I own 10% equity (a family member also owns 10% and owes the same amount. I'm likely to sell up or rent out this property within the next 12 months.

- Currently there is no emergency fund. That was the purpose of the regular saver (6%) which I've later realised isn't ideal because it can't be touched for 12 months except to be closed without gain. I'll look into high interest current accounts to start fresh ASAP.
- I'm saving for other things such as car insurance, although my annual bonus is more than sufficient to cover this cost so the saving is in case of emergency really (could be merged into the emergency fund?).
- My employer contributes 12% and I add 5% to my pension for a total of approx £4100 annually. I can contribute as much of my salary as I wish to this. Should I be moving this 5% to the emergency fund until it's complete? Currently have approx. 10k in pension.


From what I see I can't reduce my car finance, my student loan's interest is lower than the gains I'd make from saving, and the mortgage will either be gone or covered by rent in the near future.

Should just be pouring everything into the high interest current account until I hit 6-12months emergency living allowance and from that point on I can start investing? I'm just trying to wrap my head around everything sooner rather than later so I can walk straight into investment when I'm financially able to, without making any uninformed risky choices. At 26 I'm a bit late to the party, and I want to retire/semi-retire as early as possible so I'd like to tackle this quite aggressively.

I'll be sure to read up like advised while I gather my emergency funds together.