Reit investment

• Using REITs to invest in real estate can diversify your portfolio, but not all REITs are created equal. • Some REITs invest directly in properties, earning rental income and management fees. Others invest in real estate debt, i.e., mortgages and mortgage-backed securities. • In addition, REITs tend to focus on a specific sector of properties such as retail or shopping centers, hotels and resorts, or healthcare and hospitals. • One of the biggest benefits of REITs is their high-yield dividends. REITs are required to pay out 90% of taxable income to shareholders. • Most REIT dividends don't meet the IRS definition of "qualified dividends." Over a 25 year period, the index returned 9.05% compared to 7.97% for the S&P 500 and 7.41% for the Russell 2000. Historically, investors looking for yield have done better investing in real estate than fixed income, the traditional asset class for this purpose. A carefully constructed portfolio should consider both. For instance, the best apartment markets tend to be where home affordability is low relative to the rest of the country. In places like New York and Los Angeles, the high cost of single homes forces more people to rent, which drives up the price landlords can charge each month. As a result, the biggest residential REITs tend to focus on large urban centers. Generally, an increase in the demand for healthcare services (which should happen with an aging population) is good for healthcare real estate. Therefore, in addition to ...

Raquel Tennant, CFP, is a senior associate financial planner at 2050 Wealth Partners, a virtual, comprehensive, fee-only financial planning and wealth management firm that specializes in helping first generation wealth builders, thriving professionals, sandwich generation wealth protectors and those transitioning from employee to entrepreneur. Tennant began her career in the fee-only RIA firm space, serving ultra high-net worth clients and is now proud to align her passion for helping younger, diverse and underserved clients, who often feel neglected by traditional firms. A graduate of Towson University, Tennant is one of the first 12 inaugural graduates of Towson's CFP Board Registered Financial Planning major and the first of her class to pass the CFP exam. She proudly collaborates with her alma mater as a writer and guest speaker to students, faculty and staff, bringing awareness to both the financial planning major and the RIA financial planning industry. She has been featured on 2050 TrailBlazer’s podcast episode “The Power of Partnership”, CFP Board’s Stay on Your Path Video, and Towson’s College of Business & Economics “Finding the Right Fit” news feature. Tennant is also a CFP Board professional mentor. REITs are companies that own (and often operate) income-producing real estate, such as apartments, warehouses, self-storage facilities, malls and hotels. Their appeal is simple: The most reliable REITS have a track record for paying large and growing dividends. Stil...

Owning real estate is among the oldest form of investing, but the costs and risks might be a poor fit for your portfolio today. Thankfully, REITs—real estate investment trusts—can provide you with most of the pros of real estate investing with very few of the cons. What Is a REIT? A The focus on providing dividend income is a result of the special tax treatment REITs enjoy: As long as they pay out at least 90% of their taxable income to investors, REITs owe no corporate tax. This doesn’t mean you get off tax-free, though. You pay ordinary income taxes on REIT dividends—most other stock dividends are taxed at a lower, preferential rate. You also may end up owing taxes on more than just dividends if assets inside the REIT are sold and the REIT realizes Public REITs vs Private REITs REITs may be either public or private companies, though most real estate investment trusts are publicly owned. Transparency and • Public REITs are listed on a stock exchange and are relatively liquid investments—you can easily buy and sell their shares. They offer great transparency because they must register with the Securities and Exchange Commission (SEC) and disclose information on their holdings and activities. There are more than 200 publicly traded real estate investment trusts, many of which are listed on the New York Stock Exchange (NYSE). • Public non-traded REITs are much less liquid investments, because they aren’t traded on major stock exchanges and may have requirements t...

• A real estate investment trust (REIT) is a company that owns, operates, or finances income-producing properties. • REITs generate a steady income stream for investors but offer little in the way of capital appreciation. • Most REITs are publicly traded like stocks, which makes them highly liquid (unlike physical real estate investments). • REITs invest in most real estate property types, including apartment buildings, cell towers, data centers, hotels, medical facilities, offices, retail centers, and warehouses. What Qualifies as a REIT? Most REITs have a straightforward business model: The REIT leases space and collects rents on the properties, then distributes that income as dividends to shareholders. Mortgage REITs don't own real estate, but finance real estate, instead. These REITs earn income from the interest on their investments. To qualify as a REIT, a company must comply with certain provisions in the Internal Revenue Code (IRC). These requirements include to primarily own income-generating real estate for the long term and distribute income to shareholders. Specifically, a company must meet the following requirements to qualify as a REIT: • Invest at least 75% of total assets in real estate, cash, or U.S. Treasuries • Derive at least 75% of gross income from rents, interest on mortgages that finance real property, or real estate sales • Pay a minimum of 90% of taxable income in the form of shareholder dividends each year • Be an entity that's taxable as a corpo...

Nareit’s REITworks, taking place June 28-29 in Las Vegas, is the premier sustainability meeting for REIT and CRE professionals—offering educational sessions, dynamic speakers, and engaging roundtable discussions on the latest environmental stewardship and social responsibility trends in the industry. REITs, or real estate investment trusts, are companies that own or finance income-producing real estate across a range of property sectors. These real estate companies have to meet a number of requirements to qualify as REITs. Most REITs trade on major stock exchanges, and they offer a number of benefits to investors. A real estate investment trust (“REIT”) is a company that owns, operates or finances income-producing real estate. REITs provide an investment opportunity, like a mutual fund, that makes it possible for everyday Americans—not just Wall Street, banks, and hedge funds—to benefit from valuable real estate, present the opportunity to access dividend-based income and total returns, and help communities grow, thrive, and revitalize. REITs allow anyone to invest in portfolios of real estate assets the same way they invest in other industries – through the purchase of individual company stock or through a mutual fund or exchange traded fund (ETF). The stockholders of a REIT earn a share of the income produced – without actually having to go out and buy, manage or finance property. Approximately What assets do REITs own? In total, REITs of all types collectively own more ...

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getty The idea of investing in real estate and collecting rents sounds good, but an owner is responsible for a host of things: making repairs, paying taxes, collecting rents and vetting prospective tenants. Also, real estate is a highly illiquid asset because the transfer of property requires appraisals, inspections, title searches, closing costs, realtor commissions and mortgage approvals. The creation of real estate investment trusts (REITs) and real estate crowdfunding has solved both those issues. REITs were created by Congress in 1960 and were designed to allow individual investors access to large-scale, income-producing real estate. Crowdfunding is the raising of small amounts of money from a large group of investors to finance an invention, a business, a project, a company, a non-profit or real estate. Real estate crowdfunding was launched in 2012 with the passage of • A REIT owns and manages income-generating real estate (equity REIT) or it makes loans to owners of real estate (debt REIT). • On stock exchanges, investors can directly buy shares in publicly-traded REITs or they can acquire them through a mutual fund or an exchange-traded fund (ETF); shares of some REITs are privately owned. • Value is returned to shareholders through dividends and share price appreciation; by law, REITs must distribute at least 90% of the taxable income back to their shareholders as dividends. • Dividend yield is the total annual dividend payment divided by the share price. Accordin...