Join Fundamental Income as they bring together an expert panel to discuss how income, inflation, and real estate intersect in today’s environment. Real estate is a uniquely positioned play on the economic recovery, a potential inflation hedge, an income generator, and a portfolio diversifier.
In the upcoming webcast, Connecting Income, Inflation, & Real Estate: An Expert Panel with Ritholtz Wealth Management, Raymond James, and Fundamental Income, Alexi Panagiotakopoulos, Co-Founder, Partner and CIO, Fundamental Income; RJ Milligan, Equity Research Analyst – REITS, Raymond James; Michael Batnick, Director of Research, Ritholtz Wealth Management; and Ben Carson, Director of Institutional Asset Management, Ritholtz Wealth Management, will be discussing a variety of market topics and how real estate plays a part in client portfolios.
For example, investors can look to the Fundamental Income Net Lease Real Estate ETF (NYSEArca: NETL) as a way to gain exposure to real estate companies that generate income from net leases in commercial property.
Net lease refers to a contractual agreement where the individual leasing the property pays a portion or all of the taxes, insurance fees, and maintenance costs for a property, along with rent. Most commercial real estate follow a net lease model. Basically, the tenant is expected to pay for all the costs related to a property as if the tenant were the owner.
Net Lease REITs are equity REITs that own properties leased to single tenants under long-term, net lease agreements which specify that, in addition to rent, the tenant is responsible for most, if not all, property expenses. The most common net lease is a “triple-net lease” which requires the tenant pay property taxes, insurance, and maintenance – the three nets in a lease agreement.
The Fundamental Income Net Lease Real Estate ETF tries to reflect the performance of the Fundamental Income Net Lease Real Estate Index, which tracks U.S. listed Net Lease real estate sector in a diversified manner by screening for real estate companies that focus on investments in net lease real estate and assigning only those companies identified to the Index. The Index places constraints on constituents to protect against concentration in any one company or tenant.
Net Lease REITs offer a source of potential income for your portfolio. Tenant pays most expenses which may make cash flows more predictable. The stable dividends may also act as an inflation hedge since rent escalation provision in leases may helps income keep pace with inflation. Additionally, IRS Tax Code clarification on the deductibility of certain income distributed by REITs may improve after-tax returns.
Financial advisors who are interested in learning more about income, inflation and real estate can register for the Thursday, April 15 webcast here.