Investing in Real Estate in the U.S. through REITs

Investing in real estate abroad remains an attractive strategy for many Brazilians, especially in the United States, where they invested $1.6 billion between April 2021 and March 2022, according to the National Association of Realtors.

The American real estate market offers significant stability and growth potential, making it an investment destination.

For those seeking a less direct and more financially accessible entry into this market, Real Estate Investment Trusts (REITs) are an excellent option.

What are REITs?

REITs are publicly traded funds that own and operate properties with the goal of generating income. By law, they are required to distribute 90% of their profits as dividends, making them particularly attractive to investors seeking passive income.

Additionally, REITs offer the advantage of investing in real estate without the complications of directly buying, managing, or selling properties.

Advantages of REITs in the American market

1. Diversification and accessibility: REITs enable investors to participate in a range of properties that might be individually inaccessible, from commercial buildings in premium locations to large residential complexes.
2. Stable historical returns: historically, REITs have offered competitive returns compared to other asset classes. From 1990 to 2020, REITs had an average annual return of 9.9%, according to the Nareit All Equity REITs Index.
3. Currency protection: investing in dollars can shield investors from the volatility of the real. Given the strength and stability of the dollar, REITs are a secure way to preserve the purchasing power of investments.

Promising sectors for REITs in the U.S.

The diversity of available REITs allows investors to choose sectors that align with their risk and return expectations.

Sectors such as data centers, healthcare infrastructure, industrial storage, and residential real estate are particularly attractive due to the growth of e-commerce, population aging, and urbanization.

Why invest in REITs in the U.S.?

• Economic stability: the U.S. is known for its robust economy, providing a secure environment for long-term investments.
• Geographic diversification: in addition to diversifying your investment portfolio, investing in REITs in the U.S. allows you to take advantage of opportunities in one of the world’s largest economies.
• Capital gain potential: well-located properties in the USA have great potential for capital gain and offer attractive returns through rentals.

Challenges and strategies for Brazilian investors

Investing in REITs in the U.S. also presents challenges, including the need to understand international tax and regulatory nuances. Effective strategies include:

• Specialized advisory: working with consultants who understand both the Brazilian and American markets can help navigate these challenges.
• Strategic diversification: in addition to geographic diversification, investors should consider diversifying among different types of REITs to mitigate sector-specific risks.

Investing in REITs in the United States offers many advantages, including access to a robust real estate market, stable returns, and currency protection.

With the right help, investors can take advantage of these opportunities without the need for direct property management, leveraging the benefits of one of the world’s most stable economies.

At Upside Investment, we are ready to assist you in exploring these opportunities by providing guidance and customized strategies to maximize your investments.

Reach out for more information on how we can help you achieve your financial goals with investments in REITs in the U.S.