She's On The Money - You Can Invest in Property With $5. Yes, Really. (A Beginner’s Guide to REITs)

Episode Date: December 16, 2025

If you’ve ever looked at property prices and thought, cool, guess I’ll just rent forever then, this episode is for you. Because while the white picket fence dream might feels further away than ever, that doesn’t mean property investing is completely off the table. This ep is your DIY guide to becoming a trust fund baby... a real estate investment trust fund baby. Victoria is breaks down the other way to get property exposure without a mortgage, stamp duty, or a single call about a broken hot water system aka REITs. Think shopping centres, warehouses, data centres and supermarkets… without owning the building, chasing rent, or committing your entire financial future to one postcode.In this ep:🏬The “trust fund baby” move that pays you from property 🏬How to get property exposure without locking your entire life into one postcode🏬 The kinds of property you’ve probably never thought to invest in🏬 Non-negotiables Victoria checks before she’ll touch a property ETF🏬 The trade-off you’re making for flexibility, freedom, and liquidity WANT TO LEARN MORE ABOUT INVESTING? Check out our investing hub filled with free resources and our investing masterclass. Join our Facebook Group AKA the ultimate support network for money advice and inspiration. Ask questions, share tips, and celebrate your wins with a like-minded crew of 300,000+.And follow us on Instagram for Q&As, bite-sized tips, daily money inspo... and relatable money memes that just get you.Acknowledgement of Country By Nartarsha Bamblett aka Queen Acknowledgements. The advice shared on She's On The Money is general in nature and does not consider your individual circumstances. She's On The Money exists purely for educational purposes and should not be relied upon to make an investment or financial decision. If you do choose to buy a financial product, read the PDS, TMD and obtain appropriate financial advice tailored towards your needs. Victoria Devine and She's On The Money are authorised representatives of Money Sherpa PTY LTD ABN - 321649 27708, AFSL - 451289.See omnystudio.com/listener for privacy information.

My name is Natasha Bamblett, I'm a proud First Nations woman, and I'm here to acknowledge country. Tii, gilinyan ganya, nianakaka yao yinbina waka, nianakai nianbina yakarumja, duminyagumiga dumiga ithawaka nirawamundamun imalan, mumibangada bomi ininyalan waka, gaunan yakarumja, wutunarana. Hello beautiful friends, we gather on the lands of the Aboriginal people, we thank acknowledge and respect the aboriginal people's land that we're gathering on today take pleasure in all the land and respect all that you see she's on the money podcast acknowledges culture country community and connections bringing you the tools

knowledge and resources for you to thrive she's on the money she's on the money Hello and welcome to She's On The Money, the podcast that shows you investing isn't just for the rich, it's for you too. If you've ever looked at the housing market and thought, that's actually literally never going to happen for me, you're definitely not alone. But what if I told you there were other ways to get your foot in the property door? I'm Bex Syed and here to show us how we can invest in property without taking on a million dollar mortgage is our favorite finance expert, Victoria Devine. Hello Vy. Hello. You can take on a million dollar mortgage if you want to, but like, if you want, that's not, that's not what you have to do to get

into the property market. That's actually crazy. And I, I mean, I'm a skeptic right now, but I really want to know. I actually hate it so much. I did a presentation the other day, actually for Australian Unity, and it was really, really cool. I went into, um, this is like complete side note. I got invited to their executive leadership retreat. Whoa. Sounds bougie, right? I was so scared where I presented to them about like, you know, our demographic, Bec, like you and I, and like what the world looks like. In 1976, when people like our parents were probably, you know, thinking about property or buying property, property costs like $25,000. Um, and the average property in Melbourne and Sydney cost about four times your

annual salary. Yeah. And so now if we look at it, property in Melbourne and Sydney will cost on average 13 times your annual salary. And if you were to, and I did all the maths and stuff in the background, that's why it's like so fresh in my mind. And I was like, Oh, you'll love this. If salary and wage growth kept up with, you know, how prices of houses had increased, our average salary would be about $190,000 each per year. So like, you know, each and every single one of us would have an average. So like Spack Bang in the middle, like that would just be the like, oh yeah, most people earn that. But the reality is we earn on average $65,000 a year. But I think that we still apply the same pressure that our parents' generation did. I said to you right now,

Bec, do you want to buy property? Definitely. How the hell is it possible? You might, you know, if we had a deep conversation, you might go, yeah, I would love to own property, but I just don't think it's accessible for me. Or I just don't think with the lifestyle I lead, like that's an option. And I guess what today is about is really teaching you that it can be an option that there's just a different way of going about it. It's not going to be the, you know, white picket fence and three bedroom home on like a 700 square meter block. Like that's just completely inaccessible for the average person because the average of that type of property in Melbourne and Sydney is about $1.2 million back. So I think that's important from

my perspective to contextualize, to give you like some solid proof that it is harder. But what if I told you that you can still get exposure to the property market without needing a house deposit or even a mortgage? I'd say Victoria, you're a liar. Victoria, what MLM are you starting? What are you doing? Well, you can actually invest in property back on the share market through something called an REIT. And like, we all know that our girl Beck, she's now got more than a thousand dollars in her shares. Isn't that crazy? That is so crazy. It was just like little bits, It's like $5 every like few weeks comes out. I think Sharesies should hit you up

so that you can be like their ambassador of like, girl, like it's actually not that hard. Yeah. I've been saying this for years. I've had this podcast, what, like six years? And I'm like, I promise it's not that hard. I promise it's not that hard. And people were like, oh no,

like I'll do it when I earn more. I'll do it when I this. Like you just started and you're like, hold on, hold on, hold on. Yeah, yeah, yeah. This is not that bad. But Beck, you could give yourself exposure to REIT. Okay.

Through Sharesies or, and like, it's not about Sharesies at all. This is more about like the ability to access REITs, which is a real estate investment trust. And these are, you can buy them on the ASX in the same way that you would like look up, you know, the ASX top 200, you would just look up REITs and see what, what comes up. But they basically own and manage big income producing properties like shopping centers or warehouses or office buildings or even like storage facilities which make bank by the way. Really? Yep and they're super super accessible so if you're like oh I really like the idea of property because to me it feels a bit more stable like the share market maybe is not what you're super super comfortable with but you also

don't have heaps of cash to start with like go you can start with five dollars. Yeah. So if you want exposure to that an REIT might be a good idea. Okay so but you say units. Yeah you can buy units in a REIT. Which is not a pun. So not shares? They're not shares? They're not shares. Okay. They're not shares and they are different. So a share and a unit is a different thing. Sometimes people use them interchangeably and those people, my friend, are wrong. I see. A share belongs to a company and they issue shares. Units belong to trusts. Right. So if you were to establish a trust, you'd have units in that trust. You wouldn't have shares in that trust. and an REIT is a trust. So you're basically a unit holder, not a shareholder. Does that make

a lot of a difference? Not really, if we're being brutally honest, because all of these things are so highly regulated, but at the same time, to me, it does change your risk profile because obviously property over time has been a little bit more stable. And like, if we look at a risk and reward chart and I like drew one up for you. We've kind of got like cash and then some bonds and like you're getting a bit more risky and property would sit there. And then like Australian shares, that's like getting a bit more risky and then international shares up here. So basically you're kind of using the share market platform to invest, but taking your risk back down to a property level. If that makes sense. Yes, yes, yes, definitely. So on the stock market or on the

share market, also very interchangeable. They trade in exactly the same way. So like, it's not more complex for you as a buyer, even though you might go, oh, but V, I've never heard of these. God, it's probably just because you haven't looked them up. Like it's because you haven't been told about them. And that's what this whole episode is for. So Beck, with an REIT, you're not technically an owner of the company. So with a share, you like buy a tiny piece of the pie and then that enables you to get part of their profit and part of their growth. And you're kind of like a tiny little CEO. Absolutely. Instead in an REIT, you are a beneficiary of the trust. Sure. So you're becoming a trust fund baby. Oh. We love trust fund babies, right? Could you

say that technically? I mean, technically you're a beneficiary of the trust. Okay. And someone who's a trust fund baby would be the beneficiary of a trust. So like to me that's the same, but I'm buying my status myself. Yeah. I didn't have wealthy parents. They didn't set up a trust for me, I'm going to do it myself. Oh my God. I love that. So if you want to be a trust fund baby, like that's maybe a way in. It's never too late to be a trust fund baby. It's never too late. And you could do it with $5. And then like in your like Insta bio, you could write trust fund baby. Wow. I think that would be fun. But what that means is like with shares, you kind of become, as I was explaining before, a part owner of the company. And like, technically you have voting

rights and dividends but like because we're tiny and because like we're only buying small amounts like you can vote but it is there's not a lot going on there sure but with units you hold a stake in the trust's assets so the property portfolio and you're entitled to a proportional share of the income that that trust generates and instead of being called dividends they're called distributions. Got you. Again, because trust fund babies get distributions. I see. And that is why with REITs, like when it comes to like tax time, you'll see annual distribution statements, which I feel like so many people are like, oh my God, like I signed up to this and at tax time, I got an annual distribution statement. And I also got my tax statement from

Sharesies and like, everything's a bit confusing. I promise it's just because it's the first time you've seen it. Like it's fine. So instead of that, you'll get your annual distribution statement instead of a dividend slip in the mail, because the income kind of flows through a trust structure, which means you're buying into that trust, but they could also like put new properties and stuff into that trust as well, which you would then benefit from. So to give you a good example, if you wanted something to look up on Sharesies, cause you're like, I don't even know where to look up this. Do I look up REIT? You could, cause like, you know, I'm not trying to be promotional here, but Sharesies has it's like AI search function. So if you looked up REIT, it would come up with

a lot of different like REIT options, but Goodman Group, I would say is, and this is not a recommendation. This is just my example. And the reason I'm using this is because it is Australia's largest REIT. I see. And it's ASX ticker code, if you want to look it up is GMG, but it's focused on industrial property and logistics. So it buys lots of warehouses and data centers. And in that space, demand has absolutely surged because of AI. So the reason AI is making that surge is because there's a lot of infrastructure needed for AI and you need to put it in warehouses, you need to put it in data centers and this company buys that. So they're just the biggest one in Australia. Are they the best? Who knows? It's not a recommendation. It's just like, if you're

starting to quote, do your research, you're like, well, how do I do my research? What does that mean? Have a look at this, get a feel for what that looks like. And then we can find some more and like maybe find one that really aligns with your values if that's what you're looking for. Cool. Okay. Okay. Okay. And like an REIT, is the only option to invest in property on the share market or are there other like ways to get in? So we always talk about ETFs or I always talk about ETFs. I don't think you're the first to bring them up. You're just like sick of me yapping about how cool I think they are. But we talk or I talk a lot about them being one of the easiest ways to get instant diversification in your portfolio.

And I would say that the property market is no different. So instead of just picking one REIT and just being like, oh, well, I hope Goodman does a good job for me. You can actually invest in a real estate ETF that would then hold a lot of different REITs. So instead of an ETF that goes, oh, I'm going to pick like the Australian top 100 and it's got things like Woolworths Group and it's got like BHP and you kind of go, oh, I know those companies. You might look at an ETF that holds REITs and be like, what the heck? And like, I don't really understand what these companies are. And that's where we've got to like do a bit of Googling. Like how good is it that we live in 2025 and we can just Google the answer. What is Goodman Group? Tell me how responsible

they are. Like I ask Google everything, right? You know what? That's a lie. I ask ChatGPT a lot. Don't tell anybody, especially you who doesn't agree with ChatGPT. But to give you another example of something that you could look up, you could look up the Vanguard Australian Property Securities Index ETF. Okay. It's a lot easier if you just type in the ticker code, a VAP. VAP. VAP. Got you. VAP. It's like a WAP. Yes. But it's VAP. But they hold lots of different REITs. So they hold Goodman, they hold Centre, and they also hold Stockland. And you might have heard a lot about Stockland before because they own lots of like supermarket locations.

So like they might own the building that then Coles and Woolies lease from. Like you walk into a Stockland and they've got like their Baker's Delight and they've got their like, you know, their Woolies and like that local place that always does a really good dumplings. Like they rent their Stockland locations out to other businesses. That makes so much sense. But it's real estate still. it's not, you know, residential real estate, but the money that they make is from the leases that

they lease out to people like Baker's Delight or Brumby's or Woolies. There you go. Right. So that's where the money's coming from. It's not just from owning property. Yes, property over time increases in value, but the income part and then Stockland also have gone into building homes. So they do like house and land packages and stuff like that. My God, may as well. I mean, the more money you get, well, that's it. Why not? That's exactly what we were going to do. These ETFs basically hold REITs and they can be a really good option for you. If you're like, well, I want access to the real estate market, but I don't want to go buy just one REIT because Victoria said, it's not always a good idea to put all your eggs in one basket. You could look at an

ETF and like, we just have to be really caught, not really cautious. I feel like I'm trying to scare you I'm not but like when we pick an ETF just really understanding what the holdings are of it yes because obviously an ETF is basically just a basket it's a it's a vehicle yep it's like a clown car right yeah but what types of clowns are you putting in the car uh-huh do you want to know which ones you've got and then you've got lots of different yeah got lots of different ones I don't want three of the same you don't want three of the same absolutely no like if you're gonna like fill a clown car like I need an elephant I need like you know an actual clown I need the monkey.

Like I want all of them in the car. You want all of them. Absolutely. But I think it's really important that you understand what companies they hold because that could give you a lot of peace of mind. Yes. And as Warren Buffet. Buffet.

You can call him Warren Buffet. Sorry, Warren. That feels bougier, but like he's American, so it would be Buffet. Ah, it makes sense. But if he was French, it might be Warren Buffet. Buffet. He says to make sure you understand before you invest. I think something like that.

A thousand percent. And I mean, maybe I'm the next Warren Buffett, watch out. But I agree. Like I just go, if you're going to buy this, just do a bit of Googling. What's Goodman? What's Centaur? Like what's Stockland? What do they hold so that you feel confident? What would be the benefits of investing in REITs and real estate ETFs? Oh, I mean, you can call yourself a trust fund baby. Yes, that's one. I think that's like number one. Probably the biggest benefit. Yeah. I would say as I touched on before, like instead of having to have a $200,000 deposit and like maybe I'm I'm scaring you a little bit because I have a mortgage broking business and I have six

beautiful mortgage brokers who get first-time owners into their properties every single day and most of the time it's not with a 20% deposit. Absolutely. But with an REIT really low barrier to entry so that you don't need a big deposit. There's no stamp duty to pay because they pay it for you. No building inspections. You just kind of open your brokerage app, pick an REIT and you're in. Oh my God, that's so good. And getting into the market, if you are a first home buyer, ask Miss Jessica Ricci. Yeah. Takes forever. So like this is a really easy way to go, I want exposure to property and I want it right now. Money win. I love a regular income stream. I don't know anybody who doesn't like getting paid. We all like getting paid, right? Absolutely.

REITs collect rent from their tenants and then they pass most of that back to their investors as distributions. Is that so? Money wins. So you can kind of pocket and they usually pay quarterly or semi-annual income. So it's not going to be like consistent, consistent. Sure. But that's the same as any type of share. You only get your distributions or your dividends, sorry, when it's a share every six months or every 12 months. So like there's no real difference there, I would say. Sure. But you don't even have to chase a tenant for rent. You don't have to be like, hey, rent's due, babes. Like they do that. You don't have to feel bad about it. I would feel bad. If I was a landlord, I would feel so bad asking for it. But you don't have to. Stockland

can do it for you. That is so good. So you don't have to worry about that. Exactly. And then I would say another benefit is the potential for capital growth. So like all of us are seeing at the moment, the property's increasing in price, like every man and his dog. And like, I'm bitching about this too. Cause like I have shared that I'm trying to buy a new house. I go to auctions and they go so far over, I'm annoyed, right? And I know that the market is still increasing. How much longer for, who knows? But over time, the value of property in an REIT can rise. And as that happens, the unit price on the stock market climbs as well. So like, let's say, you know, 10 years ago, an REIT would have cost you 10 bucks to get into. Now this one

in particular might be $20. That's kind of how house prices go too. So that's kind of a win. and just like shares if investors get really excited about like certain sectors like if you if you're really into AI and you're like oh I love the idea of having lots of data centers full of like AI infrastructure you can find like an ETF that holds only those REITs or you know if you're a little bit more conservative and that's why I've mentioned Stockman and Goodman right these places they just own really big like the skyscrapers in the city which as you can tell are quite tall lots of different tenants on lots of different levels yeah stockland has supermarket like facilities but they're not just the one supermarket it's like the whole center right

you might go oh i really like yeah some of the little shops you know in a like financial downturn might have to close um you know the nail shop might not get as many clients actually that's not true the nail shop during a financial downturn booming because of the lipstick index yes so like The little treaty treats. People are like, you know what, if I can't buy a new car or I can't pay rent, I'll just get my nails done and then I'll feel good about myself. Anyway, completely different conversation, but you still have access to capital growth because you go, well, during financial downturn, the supermarket, people still need food. We all buy out the toilet paper. That's so true. So I'm pretty sure Woolies could still pay their rent. Yeah, absolutely.

Right. Anyway, then I love liquidity. So liquidity is basically how quickly you can get rid of something. So if I said to you, how liquid are you right now, Bec? You probably have some cash sitting in a bank account and we could like trot down to the AATM, pull that out. Great. Very liquid. Your ETFs or your like shares on your Sharesies app, not as liquid, but you could probably get that cash back into your hands in like three days if you really, really needed to. So a little less liquid, but then property in general, like if I, and my house is on the market right now, as of recording, I'm trying to sell that, but I don't get cash for that the second I decide to sell. True. I've had to lease the property. I've had to style the property. I've

had to, you know, put it online. We're doing open for inspections. And then once someone decides to buy it, we have settlement. I'm very flexible on settlement terms, but most properties settle between 30 and 120 days with 90 days being the most common settlement. Yeah. That's at least three months. Got you, got you. Before I can get that cash back in my hot little hands. So not liquid. Not very liquid, not very liquid. But when you're buying and selling REITs, you've got that three day share thing. It's like the same as the share market. So like you can just sell your shares in that you don't have to wait for them to sell the supermarket. Yeah. So I really like that there's no waiting months for settlements or like paying an agent to list your house and

you can kind of rebalance or top up or cash out whenever you need, but still get exposure to real estate. Yeah. Okay. If that's what you're into, right. I like that. And then I would say the last thing, none of the additional stress in REITs exists for being a landlord. So like someone like you or me who kind of, I don't think either of us resonate with the idea of being a landlord. But there is teams of leasing experts and maintenance experts and tenant negotiators and finances. You aren't involved in any of that. So if you really like the idea of real estate, but you also like, I don't want to buy a house, lease it out and be an investor in that way. This could be a sexy option. That's such a great idea. And I know you don't

have like, you know, a lot of people want to get into, I mean, I do personally, you know, buy properties for the security of having a roof over my head forever. But with this in an indirect, but also direct kind of way, you could make money with this to eventually afford something like that. So I know that this isn't like, you know, so I'm actually curious, do interest rates like affect the REITs? Yes, they do. And I feel like there's been a lot of conversation about interest rates recently. So firstly, one thing that is very important to note about REITs is that as you probably could understand, just like you going and buying a residential property, to have an REIT, it takes a lot of debt to buy and run properties. Like these aren't always super, like if you looked

at their balance sheet, they might be generating some great cash, but they might also be in a whole heap of debt. And that doesn't have to be scary. But if interest rates fall, money's cheaper. So borrowing gets cheaper, which then boosts the profits that they get because they're not paying 6% for their mortgages anymore. Technically they might be paying five and a half percent. And that makes a big difference in an REIT because we're talking about millions, if not hundreds of millions, if not billions of dollars worth of property. So we're not talking, oh yeah, they own like $3 million worth of, but that's not it at all. It's massive. So if interest rates rise, the debt actually gets more expensive and then it eats into the returns that you get.

So right now, and this is one of the reasons why we're doing this episode is lots of people are going, oh, interest rates are dropping. REITs are looking a little bit more sexy. V, tell me a little bit more about them because they're obviously becoming a little bit more attractive. Secondly, an REIT is built for income so like otherwise it wouldn't exist because what's the point of creating this structure and having this trust if we're not making money? Of course. Like there's no point. Yeah. They're required to pay out so legally they're required to pay out most of what they earn straight back to investors. Wow. Money win which makes them I would say very appealing in low rate environments when things like term deposits or bonds are over. So you're probably

seeing a lot of conversation in our She's On The Money community, but also the community in general about like, oh, my like interest rate on my high interest savings account is going down. What the hell? Well, that's because interest rates are coming down. And when interest rates come down, so does your savings rate, but then your mortgage rate drops. So it's like a great time to have a mortgage, but not a great time to have a savings account. So something that's also interesting is that REITs usually move or change their cash rate before the RBA even makes its announcement because markets are forward looking. So they're kind of predicting, oh, this will go down. So we're going to change this and this. And if investors expect their rates to go up, like

their interest rates, they're going to be paying more money. They often start selling REITs ahead of time because they're like, okay, cool. I can see the interest rates are probably going to surge, like maybe I'll sell now because I don't want to be in this anymore. And if they think that cuts are on the horizon, i.e. right now, there's a lot of conversation about, oh, when's the next interest rate cut? What's going on? REITs can really rally before the RBA even touches the cash rate because people are kind of like, oh, we better get in because it's about to get good. Got you. Right. But Bec, you and I are long-term investors, so we don't actually want to be dipping in and

out, but that's just how the market reacts. So I'm thinking about like risks and stuff like that. So it sounds like that's the only risk. Like if, you know, there's an expected rate increase, they start selling REITs ahead of time. And then I assume we don't make as much money, but like, is that the only risk? No. And I would not be doing my job if I didn't try and scare the hell out of you at the same time. It's like educate you, right? I would say the interest rates are only one part of the bigger puzzle. If you're really serious about adding property to your portfolio, I would say that there are a lot of other things that you really need to be across. So let's take a really quick break because I need a cup of tea. I'll walk you through the stuff the

very switched on investors are actually looking at because the last thing you want to do is invest in something that you actually don't understand. So guys, don't go anywhere. All right, Bec, we are back. And before the break, you asked about whether interest rates were the only risk when it came to investing in an REIT. And I was like, oh no, like I haven't done my job if I made you think that that's the only risk. And as much as I want to be positive, I also am an ex-financial advisor. So I'm like, let's talk about the risks, like risk, risk, risk, because yes, we want rewards, but I also want you to be really well-educated. So the answer is no. And there are a handful of other risks that I want to go through. And I've written a little list for you

so that we don't get too off track. Because like, as you know, I was born to yap. So let's go through them. And the first one that I've written down is sector specific risks. Okay. I wish I had given myself a little bit more clarity on that one before writing it down. But what I believe I meant by that, Bec, is that not all property sectors perform in exactly the same way. Like before we touched on warehouses and data centers booming at the moment because of AI infrastructure and that I would say are pretty new and that's obviously going to perform in a very different way than us leasing out a supermarket right because like there's one that I would say is a little bit more stable and one that's a little bit more topical so retail REITs like the shopping centers

they can kind of struggle if consumer spending is slow or if like online sales have like picked up but like obviously they're going to be different depending on the economics of the world there are office REITs so you know how I say sometimes oh the skyscrapers they are especially sensitive at the moment because there's all this work from home conversation going on after COVID and like there has been this conversation recently about legally requiring staff that can to let them work from home for two days a week. Love that. Yes, we do. But do you think an REIT that then owns office space is going to love that? I see. Yes, probably not. Because like they make their money from putting bums on desks. And yeah, does that make sense? Absolutely. So at the moment we are

seeing really high vacancy rates in CBDs. The next thing I wrote down is I believe there's tenant risk. So REITs come with this risk that your tenants just don't pay rent on time. Yeah, that's true. Happens to the best of us. Like what if they just decide not to pay rent? Yeah. Where's our income come from? So if a big tenant, like, I don't know, a supermarket or like you're looking at a Westfield, they lease to places like Meijer and David Jones. And I mean, I'm just trying to contextualize it to give you examples, but what if those department stores go, oh, we

don't want to have a Maya here anymore. Like it's not, it's not very good. And then that's an empty space. That's a really big empty space. How many other tenants or how many other people would go and lease a space that big? So how long is it staying empty? And a Maya, you're going to need like four, five different retail shops. Exactly. And then also what about the smaller shops where people maybe have opened their small business in one Westfield and taken on this lease and then they're not making money. So they default. So they've got all their stuff in the shop and we can't really lease it out to someone else yet. We have to go through a legal process, but they're not paying rent. Income for that REIT is going to drop. And then the next is property

valuations. So if property prices fall, which over time, sometimes they fall and sometimes they rise or valuers decide, oh, I don't think that asset is worth as much. Like they downgrade an asset. The REITs, what's called an NTA. So a net tangible assets drops, which can then hit the unit price as well. So any other risks? Yes, I have two more. Okay. Oh my God. Well, I just want you to know that I'm mentally blocking these out because I am going to go get an REIT after this. Okay. Well, I wasn't trying to sell you and this is not advice. This is just information so that you can make your own decision, right? Yes, ma'am. Because I would never give advice because that would be against my financial services license. Um, just to remind everybody, I'm a legitimate,

like licensed person to give general financial advice, which sounds really fancy. Yeah. It means I can't just raw dog content. No, she can't be like, it's rude. It's rude. Anyway, two more things that I wrote down and this is not going to make sense, but I will tell you, dilution and capital raisings. I see. I see. So because REITs have to pay out most of their income by law, like that's the rules. They often have to raise more money by issuing new units. So if they're like, oh, we want to buy a new property. Like let's say they've got a million dollars coming in, but they actually have to give most of that to their shareholders to get new property. They need more money coming in the door. And it can't really be in income from the properties because

if it was, they'd have to give it to you back if you're going to own an REIT. So what they'll do is issue new units. Does that make sense? That makes sense. So you're kind of diluting it and making it less, it's like watery accordio. Yeah. Okay. We like strong accordio. Like if we're taking a fruit cup crush, I don't want to follow the instructions on the packet. We want it jam packed. Exactly. It's like drinking Milo. How many scoops? Do you follow the tins rules? I just put a tiny bit of milk. Yeah. And mostly Milo. It's basically a paste. Exactly. Because we're here for the Milo, not the milk. Exactly. The milk is just the vehicle to make the Milo more enjoyable. Milk you could even go without. So good. And then last one, because we're going

to get back on track because I'm pretty sure people are going to get pretty bored of me just yapping about REITs really quick. But the last one I've got is market sentiment. And even if the underlying properties are really steady and really good and you know from a logical perspective we're putting our like Warren Buffett hat on for a second we're like no like we're here for the long term we're not here for a short term like that's all fine and good REIT unit prices can kind of swing around with the broader share market so like if people are getting anxious and we saw this during the GFC and we saw this during COVID. What happens is if there is a downturn, we feel less confident as investors. We kind of see what's going on because like we are always

consistently as human beings trying to keep up with the Joneses. We are really bad at like comparison. So often investors sell REITs because they want their cash back and they're kind of like, oh, I just need to like be secure. That's not how you be secure long-term, but okay. But this can push prices lower because if everyone's selling, obviously the market sentiment is not as good. So regardless of how good the properties are, regardless of whether they lost a tenant or not, the price of the property can drop just because people are basically scared. Okay. Got you. And that's not a bad thing. That's just how the market is. And that's where with really good

education, you and I might go, oh, I see how the market's a bit off, but that REIT hasn't lost a tenant, like they're still really good at income producing. They're at a bit of a discount. That's when a lot of good investors get into the market and go, oh, hello. Yeah. Okay. But again, we can't time the market. No. But you know, you might see a little opportunity and splash a little bit more cash. Why not? So how do you know if an REIT is a good buy? Like if you're evaluating it and having a look. Yeah. Okay. So it's just like shares, honestly. You don't want to buy into an REIT just blindly. Like if you just heard a couple of names on this podcast and you're like, they must be good or just buy it. Like, don't do that. You're better than that. Even things I say need

to be taken with a grain of salt. There are three big areas I would say I want you to check before you invest. Sure. So what are the properties, Bec? What are they? This is all about what's inside the portfolio. And you'll find this in like the facts sheet or the investor presentations. they'll be on their websites really easy to find so it'll show you like what's the sector mix so are they warehouses are they health care are they retail are they CBD high-rise offices is it Coles and Woolies like do you know what I mean yeah the next is whale oh whales yes whales can you see whales from the that's what you need to be figuring out yeah figure that out but it's actually the weighted average lease expiry weighted average lease expiry okay yeah but

we're looking for the whales. Yep. Got you. Got you. So longer leases, steadier incomes. Yes. And instead of being like residential properties, commercial properties can sometimes be leased for like even 10 or 20 years. God, that's good. As an investor, low key, I love that. Yeah. Because like you're telling me secure income. Secure. We like that. I want to know I'm going to get paid. Yes. Right. And like Coles and Woolies aren't going in and I'm just using these as examples because I think we just get it easier. Like I am, if nothing, a visual learner. Oh yeah.

I was never good at reading the textbook and then being like, oh, it makes sense. Like, but if the like teacher at the front had drawn a diagram, I'd be like, oh, I get it immediately. Like that's all good. I agree completely. My best, when I was at university,

one of my best lecturers, her name is evading me right now and someone's going to slide into my DMs and remind me she was this little old lady. Like she definitely could have retired, but she clearly was too passionate. it. Oh my God. And she was my financial management lecturer when I did my MBA at RMIT. So you can slide in and tell me who she was, but she would use examples of owning a cupcake shop. Oh my God.

Every time we would like talk about some type of like very serious, like financial management technique, she'd be like, okay, so in your cupcake shop. And I'd be like, Slay Queen, I get it. That's so clever. I feel like I would get that too. That's so smart. Because if she's like, okay, cool. Like, you know, when you're talking about your balance sheet, like you obviously have to buy flour and eggs and I'll be like okay that makes sense like and I'm paying rent like totally anyway I just try to make it make sense and obviously I'm not very good at it because I just told you to look out for the whales and that makes no sense but the longer a lease is like Coles and Woolies aren't signing a lease for one year yeah they're planning on being there kind

of forever I would assume like groceries aren't going anywhere more often than not those bigger businesses are signing 20 year leases and going, yeah, we want that site for 20 years. Yeah. Good deal for your income because shorter leases, when you look at it actually means more risk because there's, you know, lots of turnover. There might be times where that small business leaves that location and there's like empty vacant time where we're finding someone new. But on the flip side of that, when there's lots of turnover, there's also the potential upside that rents can reset and you can kind of like charge the next person more. Whereas if you're negotiating a 20 year lease, you'll be like, well, yes, I'll pay this price in the start,

but there's usually an agreed upon percentage that that rent increases by. And you can't really go, Oh, actually the market's doing really well. Instead of 2%, we might increase it by four. You can't do that. Sure. So like pros and cons. And then with looking at properties as well, I've mentioned it a few times, occupancy. So are there people actually leasing these properties back? Ideally, 95% of their properties are tenanted and leased out. Lower than that, I just feel like you could be getting some patchy income. Yeah, that makes sense. That makes a lot of sense. And when they're big, like 5% of not leased out, that's red flag material to me. Oh yeah. Like what's going on there? The next thing, let's talk about money. Okay. Sorry.

this is where we have to zoom out and boring but I'll do it for you I won't actually do it for you but like think of me while you're reading the financial results and annual reports because that's where I get very excited I want you to talk about gearing so like this is just talking about their debt levels so moderate gearing is pretty healthy and that's where their gearing or the debt that that company holds is between 20 to 35 percent it's pretty normal I would say that's a healthy middle ground. I don't know what gearing. So it's just basically the percentage of debt you hold to the income that you have. I see. So like, you know, if you're drowning in debt, Bec, and 95% of your income is going to paying off your debt, you're probably struggling.

Got you. But if I said, oh, 30% of your income's going to like your mortgage repayment or 30% of your income's going to debt, like that's not so bad, is it? Sure. Yeah. Like that's a bit more comfy. Absolutely. So when I talk about gearing, moderate gearing in these companies, I'm happy to see 20 to 35%. Yeah. So the rest of the income that's coming in, like isn't paying off debt. Yeah. It's going to you, the investor. That's what we want to see. Yeah. And then NTAs. Not the asshole. No, no. It's actually a net tangible asset versus price. I see, I see. We're going to look at those. So I want you to compare what the REIT is trading at to the underlying value of the property. So paying a big premium, I would say is really risky if the growth

isn't showing up. Like don't overpay. Just don't overpay Beck. Yeah. For nothing. If you can help it. If you can help it, but also we can help it by doing our research. Yes. So true. And then the last thing that I would say is the people. The people. Gotta have good people. Well, yeah, you do. Good people make a good business. And if it's toxic, no. I mean, you can't tell that from the outside. But finally, I want you to have a look at who's in charge. Like if you're looking at an REIT, who's managing it? Like, is it some trust fund kid who just got a really big amount of money and like mummy and daddy let them buy some stuff? That doesn't happen often, but like, obviously that to me would be a pretty red flag. But like, I want to see that there's an experienced

team who've been doing this for a number of years. I want to see a history, a really stable distribution so that the people who own the REIT, we get paid and we get paid consistently. And ideally their internal management exists so that their interests are aligned with the investors. They haven't just been brought in from different sectors. Like I want property people managing my property. I don't know about you, but I read a book and you definitely didn't, but it's called The Richest Man in Babylon. Not because you didn't read a book, girl. I know you read books, but like you didn't read The Richest Man in Babylon. But I will tell you that that's a fantastic investing read. In fact, it's one of the first books I want you to pick up if you're

going to start investing to understand just investing methodology and where it's come from and how it works. But I will warn you, it's the most boring book you'll ever read. God, I can't imagine. She's so dry. Oh man. She's so dry, but she talks about like marketplaces and like way back when. Gorgeous. Anyway, I can give you the TLDR on that so you don't have to read it. But one of the top tips in there is they say, do not take advice on buying diamonds from a bricklayer. Uh-huh. That makes sense. Right. So like a bricklayer might be really passionate about diamonds because like one time he bought his girlfriend an engagement ring, but that doesn't mean he knows everything about diamonds. I'm probably, if I'm going to buy a diamond, that's

a really big expense. I'm going to go to a diamond expert. I'm not going to go to the bricklayer. Yeah. So I think it's about getting your advice from the right places. And I would say there's been instances of external management of some Australian ETFs that prioritize fees over, unit holders income. So I just want the right people doing the right thing. And like, just does the management look like they know what they're doing? So I guess for real estate ETFs, like just to summarize it all, one of the benefits of a property ETF is that you just don't need to do a deep dive into every single landlord. You know how I was like, look at their management team, do this, do that. Like if you're buying an ETF, you basically don't have to worry as much

because all the hard work's been done by you, by the ETF manager. They wouldn't have been putting it into the ETF it was if it was terrible Beck because like their whole job is to make an ETF that performs I promise you they have gone through every single one and be like good bad no you don't make it to the ETF that's what we want like they're the gatekeepers but I would say that if you're looking at a property ETF you still need to look at the facts sheet because we still need to know what we're buying yeah I want you to know what sector are you buying into does it tilt one way or the other like is it really health care is it really supermarkets you know what are the top holdings and do they kind of make sense to you so you don't need to look into the top 100 that's

okay what are like the top five right when you google them and when you look at those companies are you like okay that makes sense holdings are so that the companies or the assets that they own so like in your etf it's a basket of shares and then inside that i just want you to know like the top five i just want you to google those might be like woolworth's coals came out yeah and i want you to be like yep cool that makes sense i see how much is it going to cost you so what are the fees. And then what does performance over the long-term look like? Again, ex-financial advisor in me is like flashing red lights. And I need to say past performance is not a reliable predictor of future performance, but it can make you feel secure. Yeah, absolutely. Can make you go, oh,

they've been doing a pretty good job for a pretty long time. The risk is less. Yes. Yes. So that's a pretty good checklist actually. Thanks. I made it up myself. And honestly, oh God, you're so smart. Well, I'm not actually, I just had to write a list and I was like, oh, it's all about the money. other people safe what are they doing I'm so god she's good I'm just so critical I'm so sorry no someone's gonna be I'll do it for you it doesn't sound as scary as I thought like kind of like normal shares I would say literally you're already kind of investing so if real estate is something that you want to dabble in this might be something that you look into I think I actually might but I think like if I add property to my shares account the ETFs are more my style so that's

it's really great advice. I just want you to have a portfolio that kind of makes sense to you. Yeah. Like I use the example of going down to the pub. Like I want you to have these conversations. Like it's not just men who talk about their shares. Like, and it historically was because they were basically trying to one up each other. Yeah. Like I want you to be like, oh my God, I found this REIT and it's like full of healthcare companies. And I really believe in that. Like, isn't that cool? Yeah. We have the power to do that. And we love an ETF as well because they're just so simple and so diversified. God, it's gorgeous. Okay, so before today, I didn't think I would ever be a property investor. And I'm sure a lot of people listening maybe think the same thing. But guess

what, guys? We can do it. You absolutely can do it. And at the end of the day, REITs and property ETFs, they're just another tool in your little investing kit. The beauty is that you can kind of dip your toe in without committing all of your life savings, which can be terrifying. And the best bit is, I would say, you don't have any tenants calling about broken hot water systems oh my god that's gorgeous i know so we'll see you on friday guys bye bye guys the advice shared on she's on the money is general in nature and does not consider your individual circumstances she's on the money exists purely for educational purposes and should not be relied upon to make an investment or financial decision if you do choose to buy

financial product read the pds tmd and obtain appropriate financial advice tailored towards your needs victoria divine and she's on the money are authorized representatives of money sherpa pty ltd abn 321-649-27708 afsl 451-289 I'll see you then.