RioCan Real Estate Investment Trust: The Real Estate Investing Secret Agents Don’t Want You to Know

Forget rental properties. Buy RioCan Real Estate Investment Trust (TSX:REI.UN) instead.

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The Motley Fool

It might be the best business ever… owning real estate.

You collect monthly rent cheques, and almost every year your property values go up. That’s why more wealth has been created in real estate than any other asset class combined.

But owning real estate is also a hassle. Unclogging toilets. Fixing leaky facets. Dealing with tenants. At least that used to be the case, until now. I’ve found a way to collect up to $1,500 in monthly rental income without becoming a landlord.

You never have to set foot on a property. All you have to do is cash your rent cheques. But the crazy thing is: Nobody wants to talk about it.

The secret “they” don’t want you to know

How come 99% of the public has no clue that such a large, safe real estate investment exists? How could it go undiscovered for so long? Why isn’t everyone doing this?

It’s because this investment threatens a big business. You see, real estate agents charge a 6% fee every time you buy or sell a property. They can pocket tens of thousands of dollars by just listing a house on MLS and filing some paperwork.

However, the investment I want to show you generates almost no fees whatsoever. That’s why agents hate promoting this opportunity. It’s not in their financial interest.

Surely, you would’ve heard about this from other financial professionals, right? No, not likely. Advisors would rather sell you a bunch of high-fee investment products. Bankers want to lock you into a big mortgage.

The bottom line is, almost nobody in real estate wants to talk about this. Because once you invest this way, you’ll never buy a rental property again.

So, what could have them so nervous? Simply put, I’m talking about becoming a partner with a successful, already-established landlord: RioCan Real Estate Investment Trust (TSX: REI.UN).

RioCan is the largest landlord in Canada. Its empire spans 331 properties throughout North America. Altogether, the trust’s portfolio totals some 79 million square feet, of which 97% is currently occupied.

However, RioCan isn’t your typical landlord. The trust only rents out its properties to quality businesses like Wal-Mart Stores Inc.Canadian Tire Corporation Limited, and Loblaw Companies Limited — rock-solid tenants that aren’t going out of business anytime soon. And because of a special loophole, it pays NO corporate income taxes.

In exchange, the trust is required by law to pass on all of its profits to investors. This is how RioCan has paid such regular, oversized rent cheques. Since 1994, longtime partners have received 210 monthly distributions in a row.

Better yet, the daily property management hassles are none of your concern. There’re no leaky facets to fix or driveways to shovel. You just sit back and cash your rent cheques.

Now you can collect monthly rental income without becoming a landlord

Best of all, RioCan mails out these payments monthly, so you can start earning income almost immediately. Today, the trust pays out a monthly distribution of 11.75 cents per unit. That comes out to an annual yield of 5.5%. And if you become a partner by October 29, you’ll be eligible to collect your first payment in November.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Robert Baillieul has no position in any stocks mentioned.

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