Equity Residential (EQR), Simon Property Group, Inc (SPG): Don’t Flip This House! A “Chickens” Real Estate Guide

Not for Chickens

It’s important to note that not all REIT investing will be stress free and simple. Simon Property Group, Inc (NYSE:SPG), for instance, is a REIT investment that would need to be watched quite closely. Simon Property Group, Inc (NYSE:SPG) owns a real estate portfolio that consists largely of shopping malls.

The shares have performed quite well for some time, trading near a 52 week high, and the REIT pays a competitive yield of 2.8%. It also owns some great properties; I can attest to Woodfield Mall (near Chicago), which is always packed with customers.

That said, despite all the positives for Simon Property Group, Inc (NYSE:SPG), it still owns property in a rapidly changing real estate environment. Online shopping is growing faster than retail. The Amazon.com, Inc. (NASDAQ:AMZN)’s and eBay Inc (NASDAQ:EBAY)’s of the world are forcing some traditional retailers (Best Buy Co., Inc. (NYSE:BBY), etc.) to switch to smaller storefronts, or go out of business completely. None of this is news; it’s just something that needs to be considered.

If you’re looking for a safer way to invest in real estate, I’d recommend passing on Simon Property Group, Inc (NYSE:SPG) for now. It’s just not quite as steady as an ETF, or a multi-family REIT, at this point.

Get your Chicken on!

Statistics show that new real estate construction is up 25% from 2009, but new development still lags 2006-07 levels by nearly half. There still could be room to run, this still could be a good time to invest, and you don’t have to be a thrill seeker to do so.

There’s no shame in avoiding saws, paint guns, and hammers. You can invest in real estate with the click of your mouse. If you invest in a REIT, or a REIT fund, with good growth prospects, your income should grow safely over the long-term.

The article Don’t Flip This House! A “Chickens” Real Estate Guide originally appeared on Fool.com and is written by Adem Tahiri.

Adem Tahiri owns shares of SPDR Dow Jones Global Real Estate. The Motley Fool has no position in any of the stocks mentioned. Adem is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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