This post is a continuation of my series Then and Now where I revisit some older blogposts and either rip them to shreds (because my thinking has changed) or I’ll confirm my position on some personal finance topics or specific investments. My previous posts in this series were about Enbridge (a star in my portfolio) and this dud which is no longer in my portfolio.
- I started writing about H&R REIT on this site back in 2010.
- I think REITs have a good home in registered accounts (like TFSAs, RRSPs) because Real Estate Investment Trusts distribute their income (primarily from rent) to shareholders usually in the form of dividends, return of capital, and income. While it depends on the REIT, if the REIT distributes a portion of their income as income as return of capital, interest, capital gains or dividends, each portion will be taxed accordingly. Keeping REITs inside a TFSA or RRSP avoids this tax complication. Consider that for your portfolio.
- I bought a small portion of H&R REIT many years ago because it was a core holding of most REIT Exchange Traded Funds (ETFs).
- I’ve decided to since “unbundle” REIT holdings since I don’t want to pay management expense fees over 0.50% for what I can own directly.
- My idea at the time was to DRIP this stock, and not stop.
- H&R REIT is now priced a bit under $22.
- Distributions from this REIT have almost doubled since early 2010.
- I continue to DRIP this stock, with no intention of stopping. I figure distribution income from this company might be enough to eventually pay for part of our property taxes every year. It’s good to be a landlord without the headaches.
My decision to buy (and hold) this company was a decent call to date although update *** I did sell all HR.UN units coming out of the COVID-19 pandemic / market rally in 2020. *** I moved that money into renewable stocks.
This is a great reminder that things can and do change.
Purchasing individual stocks has risks and the buyer must always beware. There are no guarantees this company (and others) will continue to perform well in the future, which is why I will be indexing more in 2015 and beyond.
What’s your take on H&R REIT? Own it? Do you own REITs?