Outside the Box: Here’s what will make real estate investing great again

Profitable enterprises can be poor investments if you pay too much for them. That’s exactly what is happening now with publicly traded REITs.

This development was forecasted in an article I wrote last February. With assistance from investment firm Research Affiliates, the article concluded that REITs would produce returns between 0% and 2% annualized on an inflation-adjusted basis over the next decade.

A representative from NAREIT, a lobbying firm for the REIT industry, took me to task in a letter, saying there were just two periods in history when REITs had done as badly as I had forecasted.

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