Real Estate Investment Trusts (REITs) are Income Securities
Investing in REITs means investing in income securities. And, every properly constructed portfolio contains securities to generate income.
REITs are total return investments that typically provide high dividends plus the potential for moderate, long-term capital appreciation. Long-term total returns of REIT stocks are likely to be somewhat less than the returns of high-growth stocks and somewhat more than the returns of bonds.
REITs provide a way to realize the economic benefits of real estate, obtain stable, consistent income and long-term growth while increasing portfolio diversification beyond what other common stocks and fixed income securities can offer by themselves.
The REIT industry's dividend yields generally produce a steady stream of income through all market conditions that is significantly higher than other equities, on average. Dividend growth rates for REIT shares have outpaced inflation over the last decade. Dividends paid by REITs are not qualified for 15% tax rate.
A real estate investment trust (REIT) is a company dedicated to owning and, in most cases, operating income-producing real estate, such as apartments, shopping centers, offices and warehouses. Some REITs also are engaged in financing real estate. Most importantly, to qualify as a REIT a company is legally required to pay virtually all of its taxable income (90 percent) to its shareholders every year.
Researching REITsBondsOnline Yield & Income Insight: Researching REITs as an individual investor can be difficult: the research found on most websites is:
(1) delayed in getting to you (institutional investors get it immediately, and other investors get it days or weeks later), and;
(2) brief.
BondsOnline Yield & Income Insight is independent research for the income investor.
We provide immediate access to in-depth REIT research in our comprehensive subscription service PreferredsOnline. For a free report, please contact us or visit PreferredsOnline.
For further information on REITs, see the website of the National Association of Real Estate Investment Trusts (NAREIT).
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