Page 44 - IreitEbook

In short, it measures how profitable a piece
OUR FINALS THOUGHTS
or group of properties are by themselves
ON BUYING REITS
without factoring in the REIT’s corporate-
While it’s tempting to get into bed
specific expenses.
with any REIT that has a high yield, that

would be exceptionally foolish. Always
Same-Store (Organic) Earnings typically
look at the fundamentals and whether
refers to revenue, operating expenses,
the dividend is secure instead.
and net operating income, though only

from property a REIT has owned for a year
Dividend safety is MUCH more
or more. This allows investors to see how
important than dividend yield. And it’s
well newer acquisitions may fare under the
more important every single time.
same management team.

(Yield is calculated as the current
FFO Growth is equivalent to a regular
quarterly dividend multiplied by four,
company’s earnings growth. It’s just
divided by the current share price.)
that traditional C-corporations (i.e.,
iREIT takes all of that into
corporations that are taxed separately
consideration, along with a whole
from their owners) measure their growth in
host of other information with every
EPS, or earnings per share. Whereas REITs
investment possibility it evaluates.
measure theirs by how much they take in
In addition, whenever possible,
through funds from operations.
we analyze the character of each

company’s management team as well.
FFO is calculated very simply by adding

same-store growth with any external

growth from developed or otherwise

acquired properties, minus that from any

properties sold.

44