My friend and I were watching the annual Hindu festival of Thaipusam in Singapore’s Little India neighborhood. Over pizza the evening before, my friend had told me a bit about the festival. She explained that participants offered their thanks to the gods by mutilating themselves in painful but not life-threatening ways. Then they trekked a four-km course, surrounded by their chanting, clapping families.

It had all sounded terribly exotic. So at lunchtime the next day my friend called for a taxi on her cell phone and we drove past the Prada stores and the Ralph Lauren boutiques, through Singapore’s immaculate highways and manicured streets, to the chattering chaos of Little India, where we found a small crowd gathered behind metal barriers to watch the agony in action.

One semi-naked man with a glassy stare weaved past us with an ornate piece of tin filigree hammered through his tongue and a huge metal canopy festooned with tassels and fabric over his head. The next strolled by briskly, as if he were on his way to the photocopier, although metal skewers pierced his sides. The showstopper was the man who had heavy bottles of sand dangling from hooks that clawed into his back and dragged his flesh into puckered folds.

I felt queasy. Where I come from, self-mutilation means an ankle tattoo. These guys were out of my league. So my friend and I decided to adjourn for a nice lunch at a nearby restaurant.

And that’s Singapore for you. If you want to experience the searing heat and exotic customs of Southeast Asia, but in English and with all the comforts of good food and great shopping, you’ll love this tiny city-state of four-and-a-half million people at the tip of the Malay Peninsula. A former British colony, it gained independence in 1965 under the leadership of Lee Kuan Yew, who served as its prime minister until 1990. Lee dominated the politics of his little nation in its early years and set out to turn it into a place where Singapore’s explosive mixture of ethnic Chinese and Malay citizens could live in peace and prosperity.

Unlike most would-be utopians, Lee succeeded, perhaps because he balanced his paternalistic belief in central planning and his blatant disregard for civil rights with a wary respect for private property and ethnic sensitivities. Thanks to him, Singapore is an odd mix of the natural and the artificial, of laissez-faire economics and government-knows-best micromanagement. It’s a city that sees nothing wrong with folks impaling themselves on metal skewers, but that fines anyone who spits on the sidewalk. It’s a city that’s fiercely nationalistic, but one that expresses its nationalism by speaking English and wearing Gucci.

To a visitor, the city hums like a well-run hotel. Crisp air conditioning, trimmed lawns and omnipresent Starbucks outlets swaddle you in First World comfort. A high-tech subway system and a huge taxi fleet shoot you to your destination in minutes. English is widely spoken, although garnished with Malay and Chinese words that create a linguistic stew call Singlish. As “eh” is to Canadian English, so “lah” is to Singlish: “That was good, lah?” or “Have a seat, lah.” Count on a few extra moments to make yourself understood, but don’t worry — you will be.

Begin your tour along Boat Quay, the historic heart of the city, close to where Sir Stamford Raffles landed in 1819 and claimed Singapore for Britain. Two centuries later, the economic tables have turned — Singaporeans are now just as rich as their former British masters.

You see Singapore’s prosperity everywhere. Along the riverfront at Boat Quay, expensive restaurants fill sun-battered trading houses that date from the 19th century. Behind them glass-and-steel office towers prop up the blazing sky. A short taxi ride away is Orchard Road, a stretch of blow-your-wallet carriage-trade shopping that makes Toronto’s Yorkville or Vancouver’s Gastown look like rummage sales.

Want something more exotic? You can enjoy a mini-tour of Asia within the city limits of Singapore. Start by visiting the Malay Heritage Centre and the imposing Sultan Mosque for a taste of Islamic culture. Then head to Chinatown, where you can battle the crowds to buy anything from gold jewelry to a cured duck carcass. Finish up in Little India for a spicy curry and cooling lassi amid a jumble of streets that make you feel as if you’re in Mumbai.

Singapore isn’t endowed with much in the way of mountains or lakes, so the government, with its usual efficiency, has built the nature it needs. At Jurong BirdPark you can ride a monorail from one shopping-mall-sized birdcage to another and feed tropical birds shipped in from around the world. You can finish up by lounging in front of a thundering nine-storey-tall waterfall — which is truly majestic and also entirely manmade. When evening falls, don’t miss the Night Safari, a three-km tram ride through the jungle. You can get up close with an imported cast of animals that includes everything from Himalayan blue sheep to African antelopes. All the animals are uncaged, but a network of hidden moats stops them from wandering and prevents you from suddenly sharing a seat with a Burmese deer.

If you have a head for heights, take a taxi downtown the next afternoon and climb on the Mount Faber cable car. It swings you into the air, more than 60 metres above Singapore’s harbor, as it sways and creaks its way to Sentosa Island, a favorite recreation spot for Singaporeans. Volleyball players and sunbathers fill the white sand beaches, then flock to bars that look as if they were airlifted in from California. Buy yourself a drink, sit back and watch night fall over the world’s busiest port. Singapore may be one of the most artificial places on earth, but, at moments like this, it’s tough not to love it.

Note that word “tasteful.” Engaged couples will be delighted to discover that a wedding video no longer has to be cheesier than an Emmenthal fondue. Many videography studios stress their “documentary” or “photojournalistic” approach to covering the event. What that means in practice is no more Godfather-based skits acted out by the groomsmen or freeze frames overlaid with graphics of hearts and doves. “We keep special effects to a minimum and we will not do skits,” says Jamieson Dean, production manager at Markham, Ont.-based Xero Digital, an upscale studio in the Greater Toronto Area.

The studio’s stylish, understated approach was just what Roderick and Anna Oandasan of Toronto had in mind for their wedding last August. The deluxe photography/videography package that the Oandasans chose to document their 250-person nuptials cost about $6,000 and they consider it money well spent. “Your wedding day is so busy and it goes by so quickly,” says Roderick Oandasan, an account manager with a pharmaceutical company. Set to songs by the Dixie Chicks, Usher and other favorite artists of the bride and groom, the Oandasans’ DVD clocks in at three hours and 20 minutes and looks as professional as a rock video.

Although Xero Digital and many of its competitors are shooting a growing number of weddings in the cutting-edge clarity of high-defi nition video, one hot young Toronto studio favors a decidedly retro approach. Nazar Melconian of mimmo+naz prefers to work in Super 8, the medium of home movies half a century ago. Often working with both color and black-and-white stock, Melconian digitally transfers the film after shooting it and then begins editing. The finished product is a DVD 20 to 45 minutes long. “Film is softer — it looks more the way your mind remembers an event than video does,” Melconian maintains. He and his partner, photographer Mimmo Galati, steer clear of what they call “manufactured moments.” Prices for a 30-minute DVD, shot in Super 8 and covering everything from getting ready for the ceremony to the first dance and the cake cutting, start at just under $4,000.

It was the Super 8 option that convinced mimmo+naz clients Carmen Volpe and Travis Kelly of Toronto to have their wedding day filmed. “We wanted something timeless, something we’d be able to watch 20 years from now and still love, and we’re very thankful that we did it,” says Volpe, an occupational therapist. One of the fleeting moments that she is especially happy to have on DVD is the expression on her father’s face when he sees her in her wedding dress for the first time.

Some clients keep the film rolling long after the wedding day. If you want to do some Super 8 shooting of your own — on your honeymoon, for instance — mimmo+naz will rent you a camera, process and digitally transfer your footage, and turn it into a professionally edited DVD, for prices starting at $600.

And the movie version of your life doesn’t have to end there. Susan Dickey MacArthur is a former TV producer for CBS and CNN who now specializes in editing and producing baby videos and email birth announcements. She founded her Manhattan-based company, First Year Films, after becoming a parent herself and realizing that there were never enough hours in the day to assemble lovingly crafted videos starring her offspring. Her company now offers a wide range of services to new parents who find themselves similarly timechallenged.

For $1,575 (U.S.), First Year Films will take video footage that the client has already shot, transfer it onto DVD and edit it into “a seamless montage of your family’s most memorable moments.” New Yorkers preferring to have professionals take charge of the memory-capturing from the get-go can hire a First Year Films crew to spend a day filming their family. The result: a 15- to 30-minute DVD, priced at about $4,000 (U.S.). For $10,000 to $15,000 (U.S.), the crew will film on multiple occasions to produce a documentary charting the child’s transformation from newborn to toddler.

You can honor older memories of your family with the star treatment, too. Jim Cooper of Socratic Productions in Barrington, N.H., specializes in Ken Burns-style personal history videos that combine live interviews with old photos and film clips. Costs range from $2,500 to $6,000 (U.S.), plus travel expenses. Diane Hollands of Life Story Videos in Vancouver produces everything from 50-minute biographies, priced at $4,000, to a budget offering called Fifteen Minutes of Fame — for $100, you can have a DVD of yourself holding forth on a subject of your choice for a quarter of an hour.

Whatever your goal, you should talk to several videographers before making a choice. Look for someone who shares both your esthetic tastes and your instincts about what to keep and what to cut. Roderick and Anna Oandasan are pleased that their wedding DVD preserves not only the big moments of their big day but also little intimate asides, such as the groom murmuring “I love you” to the bride just after the ceremony. But some of what was recorded was a little too personal: killing time while the bridal party was dressing, the groom’s attendants mooned the camera. Xero Digital edited out the backside nudity, and a grateful Roderick Oandasan approved the director’s cut. “That’s one part of the day I only needed to see once,” he says.

Fortunately, there is an easier way to become the next Donald Trump. Rather than buying rental units directly, why not invest in property through Real Estate Investment Trusts? REITs are professionally managed trusts that buy investment properties such as hotels, apartments, office towers and warehouses. They rent out these properties and generate cash for investors. In effect, you get to be a landlord without ever having to paint a kitchen or evict an ornery tenant. If rents go up, you benefit just as you would if you owned the property directly. And if times turn tough, REITs offer you the benefits of geographical diversification. Since most real estate trusts own dozens if not hundreds of properties scattered across the country, a downturn in one market isn’t as disastrous for them as it would be for a landlord with just a single property.

Thanks to a healthy economy and a booming real estate market, REITs have produced sizzling returns over the past five years, with most achieving gains of more than 20% a year. Calloway REIT of Vaughan, Ont., which owns 1.7 million sq m of space in shopping centres across Canada, tops the pack with an amazing 81% annual return since 2002, but even the median performer among Canadian real estate trusts achieved a 25.5% total annual return over the last five years.

Can REITs keep producing double-digit returns? The short answer is that it seems unlikely. The gradual decline in long-term interest rates over the last few years propelled many of the recent gains in real estate trusts and it’s difficult to see how rates can go much lower than current levels. Another factor that helped REITs in recent years was massive buying by large pension funds, which came around to the notion that real estate was a good long-term diversifier against the ups and downs of the stock market. That factor, too, appears to have largely run its course.

REITs can still be attractive investments, but you should approach them with caution. Before buying, take a moment to add up the amount of real estate that you already hold. If you’re a homeowner, consider how exposed you want to be to the vicissitudes of the property market. In general, it’s not a great idea to have more than 33% of your total assets in real estate — if you own a home, you may be over that mark already. On the other hand, if you’re renting while you save up for a home, and you’re concerned that real estate prices will keep going higher, you can buy real estate trusts as a partial hedge against soaring property prices — if home prices go higher, so, too, should the value of your REITs.

Right now, the REIT party is going strong and prices are high. So bide your time and wait, if need be, for the right buying opportunity. You may be glad you did. Some REITs are facing an uncertain future because of the federal government’s decision last fall to crack down on income trusts. The government initially announced that most REITs were to be exempted from the new rules — but since then many trusts (including Calloway, RioCan, and IPC U.S.) have discovered that they may be clipped by the changes after all, depending on how the final REIT exemption is worded. REITs that hold hotels, retirement homes, and non-Canadian properties face the greatest risk of being hit. Some may have to restructure, and a few could be hurt.

Before you buy any REIT, make sure you know how it stacks up against its peers. You can assess a good cross-section of Canadian real estate trusts in Realty roll call below. In compiling the table, we stuck to trusts for which we had a large amount of information.

Most investors’ eyes will immediately shoot to the column labelled “Distribution yield.” This is the percentage of your purchase price you’ll get back each year if the trust maintains its current distribution. A distribution yield of 10% on a trust that sells for $20 a unit implies you’ll get $2 a year in cash payouts.

Why is this so important? Because most investors buy REITs for a steady, dependable flow of income. Therefore REITs that pay higher distributions are more attractive. But you shouldn’t just buy the trust with the highest yield, because not all distributions are created equal. The trusts that pay the most are typically ones that the market views, for one reason or another, as less stable — perhaps because they’re smaller operations or because they hold properties with less dependable tenants. The higher yields are your compensation for taking on extra risk.

Tax matters, too. A distribution may be made up of many types of cash — capital gains, return of capital, or operating profit. Since each of these sources of cash is taxed differently, two trusts with the same distribution before tax can wind up putting significantly different amounts in your pocket after tax depending on exactly what makes up the distribution. Before buying any REIT, you should figure out the true after-tax distribution in your own case. Don’t rely on generalizations.

One of the most important questions you should ask about any REIT is whether its distribution is sustainable. A good clue is how much a REIT pays compared to the amount of cash it generates. To figure out how much cash a trust is producing, look at what’s known as Funds From Operations (FFO), which is roughly a trust’s net income with depreciation added back. FFO, which you can usually find in the trust’s financial statements, is based upon the idea that properties generally rise in value over time instead of depreciating at the rate used by accountants. While that may be true, FFO doesn’t include money needed for property maintenance and therefore generally overstates the cash generated by a trust. Despite its flaws, FFO is a standard measure for REITs. Just keep in mind that it can present a slightly rosy picture of a REIT’s true ability to throw off cash.

You should compare how much a trust is paying out in distributions to how much cash it’s producing in FFO. This is known as the FFO payout ratio. (For the detail-oriented, the FFO payout ratio is equal to distributions divided by funds from operations generated over the last 12 months). Most real estate trusts pay out nearly all their FFO as distributions and there’s nothing wrong with that. But if a trust pays more than 100% of its FFO, you should be wary. It’s living on the edge since it’s paying out more cash than it’s producing and may have to trim its distribution.

For most investors, the most attractive real estate trusts tend to be those that pay you a nice distribution, but that don’t pay out more cash than they’re generating. The REIT with the highest distribution yield, and a payout ratio of less than 100%, is Royal Host, which sports a yield of 9.4%. Just behind are InnVest, with a yield of 7.8%, and IPC U.S., which generates 6.5%.

These same three trusts also shine when we look at price-to-FFO ratios. These ratios are similar to the price-to-earnings ratio you’ve probably seen for stocks. Both are ways of comparing the price you’re paying for a security to the value that it’s creating. Like conventional P/E ratios, a low P/FFO ratio tends to indicate a good bargain, but it may also point to modest expectations for growth. The low P/FFO leaders in today’s market are InnVest at 11, Royal Host at 12, and IPC U.S. at 14.

Each of these three trusts boasts some attractive features, but none is a surefire moneymaker, and each is threatened by the federal government’s new trust tax. Royal Host, for instance, focuses on North American hotels. It owns 37 properties, manages others for third parties, and franchises 109 locations under the Travelodge and Thriftlodge banners. It’s been churning out money and has increased its distribution five times in the last two years. But hotel profits tend to go up and down with the economy. Also, Royal is a fairly small REIT, which makes it a little riskier than some of its larger peers.

InnVest, another hotel REIT, is much larger than Royal Host. Its portfolio contains 125 Canadian hotels plus a 50% interest in the largest hotel franchisor in Canada. Because of its size, InnVest is perhaps the better option for more conservative investors; it is also less expensive on a P/FFO basis.

IPC U.S. owns commercial properties in the U.S. and invests primarily in class-A office buildings. Several large deals in the U.S. have jazzed up that market in recent months and IPC wants to take advantage of the buyout binge (and avoid the new trust tax) by selling itself to the highest bidder. It put itself up for sale at the end of January. Of course, wanting to sell and finding a buyer willing to pay a premium price are different things. But in the meantime IPC is producing a distribution yield of 6.5%.

Before buying any REIT, you should be sure to read the firm’s latest press releases and regulatory filings. Scan newspaper stories to make sure you’re up to speed on recent developments. A trust’s annual reports and investor presentations can give you a lot of information about the challenges and opportunities ahead.

My advice? After years of strong gains by REITs, it’s hard to be wildly enthusiastic about most of these trusts at current prices. But even in a hot sector there are a few unloved laggards with low-P/FFO ratios that are worth a second look. And if you’re patient, my suspicion is that you’ll see several opportunities arise over the next couple of years as the red-hot real estate sector cools and bargains begin to emerge.