Getting into property is very capital intensive. Are there alternatives? Sure, you could buy shares in a REIT (real estate investment trust) - say it like ‘treat’.
Not my cup of tea but someone asked, so here goes.

REIT insights.

A REIT is a company that owns and operates incoming producing properties including commercial (malls and offices), warehouses, hospitals and even apartments.

A REIT allows investors (share buyers) to have the ‘benefit’ of the physical asset without the headache of maintence and rent collection.

A REIT must be listed on the JSE.
The biggest benefit for a REIT is the tax dispensation, which allows a REIT to distribute 100% of its ‘income’ after expenses without incurring a significant tax burden and exemption from capital gains tax.

Don’t worry, distributions are taxed in the hands of the shareholder. So SARS gets its action - ALWAYS.

To remain listed on the JSE, REITS are required to distribute 75% of their distributable income. What this is exactly is matter of ongoing debate.

As a share purchaser you take ordinary equity risk like any other purchaser of shares.

Some REITS on the JSE:
- Vukile Property Fund
- Emira Property Fund
- Resilient Property Fund
- Growthpoint Properties
- Redefine
- Delta Property Fund
- Rebosis Property Fund

Yes your fav Balwin is a REIT.

How are REITS fairing at the moment? In short (generally) - it’s a blood bath, investors are not only losing out on value growth (share prices have dropped) but are not receiving dividends also or are receiving significantly reduced divs: This is why:

1. The economy is in shit therefore vacancies are high in many shopping malls/offices putting a strain on rental income and affecting the ability of REITS to repay their debt and pay dividends.

2. Valuations have had to be significantly revalued and reduced because in the good times we over estimated the value of commercial and residential properties because of ‘high’ demand.
The SA property market is truly i-finda finda for the most part.

The reduced rentals and revaluations are putting a heavy strain on covenant compliance (periodic financial testing of a company by lenders to check its viability).

Some residential focused REITS have shifted their focus from sales only to sales and rentals again signifying the tough times in the SA property market.