S&P 500   4,288.39
DOW   33,433.35
QQQ   361.26
Nvidia Stock, Christmas Comes Early If You’re On the Fence
Is Gold Really Boring? (Ad)
Here’s Why Cloudflare may be the Ultimate Cloud Stock to Own
3 Drone Stocks That Can Lift Your Portfolio Higher
Is Gold Really Boring? (Ad)
Fed's Powell gets an earful about inflation and interest rates from small businesses
3 Quality Stocks On Track for Significant Dividend Increases
Is Gold Really Boring? (Ad)
5 Reasons Why Arcos Dorados Is A Perfect Investment for 2024
These Great-Grandparents Booked 51 Back-to-Back Cruises Because It's 'Cheaper Than a Retirement Home'
S&P 500   4,288.39
DOW   33,433.35
QQQ   361.26
Nvidia Stock, Christmas Comes Early If You’re On the Fence
Is Gold Really Boring? (Ad)
Here’s Why Cloudflare may be the Ultimate Cloud Stock to Own
3 Drone Stocks That Can Lift Your Portfolio Higher
Is Gold Really Boring? (Ad)
Fed's Powell gets an earful about inflation and interest rates from small businesses
3 Quality Stocks On Track for Significant Dividend Increases
Is Gold Really Boring? (Ad)
5 Reasons Why Arcos Dorados Is A Perfect Investment for 2024
These Great-Grandparents Booked 51 Back-to-Back Cruises Because It's 'Cheaper Than a Retirement Home'
S&P 500   4,288.39
DOW   33,433.35
QQQ   361.26
Nvidia Stock, Christmas Comes Early If You’re On the Fence
Is Gold Really Boring? (Ad)
Here’s Why Cloudflare may be the Ultimate Cloud Stock to Own
3 Drone Stocks That Can Lift Your Portfolio Higher
Is Gold Really Boring? (Ad)
Fed's Powell gets an earful about inflation and interest rates from small businesses
3 Quality Stocks On Track for Significant Dividend Increases
Is Gold Really Boring? (Ad)
5 Reasons Why Arcos Dorados Is A Perfect Investment for 2024
These Great-Grandparents Booked 51 Back-to-Back Cruises Because It's 'Cheaper Than a Retirement Home'
S&P 500   4,288.39
DOW   33,433.35
QQQ   361.26
Nvidia Stock, Christmas Comes Early If You’re On the Fence
Is Gold Really Boring? (Ad)
Here’s Why Cloudflare may be the Ultimate Cloud Stock to Own
3 Drone Stocks That Can Lift Your Portfolio Higher
Is Gold Really Boring? (Ad)
Fed's Powell gets an earful about inflation and interest rates from small businesses
3 Quality Stocks On Track for Significant Dividend Increases
Is Gold Really Boring? (Ad)
5 Reasons Why Arcos Dorados Is A Perfect Investment for 2024
These Great-Grandparents Booked 51 Back-to-Back Cruises Because It's 'Cheaper Than a Retirement Home'

Real Estate Investment Trusts (REITS)

A real estate investment trust (REIT) is a company that owns, operates, or finances income-generating real estate. Similar to mutual funds, REITs pool capital of multiple investors to purchase investment properties, mortgages, and other real estate assets. This page lists the 100 largest United States REITs by market cap. What is a REIT?

MarketRank™ evaluates a company based on dividend strength, earnings, valuation, analysts forecasts, and more.
Available with a MarketBeat All Access Subscription
MarketRank™Upgrade to All Access to use the All Ranks Filter
Media sentiment refers to the percentage of positive news stories versus negative news stories a company has received in the past week.
Available with a MarketBeat All Access Subscription
Media SentimentUpgrade to All Access to use the All Sentiments Filter
Analyst consensus is the average investment recommendation among Wall Street research analysts.
Available with a MarketBeat All Access Subscription
Analyst ConsensusUpgrade to All Access to use the All Ratings Filter
CompanyCurrent PricePE RatioMarket CapVolumeAverage VolumeDividend YieldAnnual PayoutIndicator(s)
Prologis, Inc. stock logo
PLD
Prologis
$109.47
-2.4%
28.81$103.67 billion3.57 million2.64 million3.18%$3.48
American Tower Co. stock logo
AMT
American Tower
$161.71
-1.7%
78.12$76.66 billion2.06 million2.12 million3.88%$6.28Short Interest ↑
Equinix, Inc. stock logo
EQIX
Equinix
$712.68
-1.9%
82.20$67.95 billion368,134347,0971.91%$13.64Positive News
Public Storage stock logo
PSA
Public Storage
$260.74
-1.1%
11.29$46.33 billion606,977722,3454.60%$12.00
Welltower Inc. stock logo
WELL
Welltower
$81.71
-0.3%
355.28$42.49 billion5.08 million2.29 million2.99%$2.44Analyst Report
Positive News
High Trading Volume
Crown Castle Inc. stock logo
CCI
Crown Castle
$90.93
-1.2%
23.08$39.91 billion3.22 million3.32 million6.88%$6.26Short Interest ↑
Analyst Revision
Digital Realty Trust, Inc. stock logo
DLR
Digital Realty Trust
$118.17
-2.4%
91.61$36.63 billion2.21 million2.07 million4.13%$4.88Positive News
Realty Income Co. stock logo
O
Realty Income
$48.99
-1.9%
36.56$35.40 billion6.14 million5.68 million6.27%$3.07
Simon Property Group, Inc. stock logo
SPG
Simon Property Group
$104.63
-3.1%
15.90$35.35 billion2.08 million1.69 million7.26%$7.60Positive News
VICI Properties Inc. stock logo
VICI
VICI Properties
$28.66
-1.5%
13.15$29.49 billion6.20 million4.71 million5.79%$1.66Analyst Report
Extra Space Storage Inc. stock logo
EXR
Extra Space Storage
$119.25
-1.9%
19.45$25.69 billion943,9431.20 million2.05%$2.44Short Interest ↑
AvalonBay Communities, Inc. stock logo
AVB
AvalonBay Communities
$168.09
-2.1%
18.91$24.39 billion713,184645,0003.93%$6.60Analyst Report
Equity Residential stock logo
EQR
Equity Residential
$57.85
-1.5%
26.18$23.06 billion1.39 million1.54 million4.58%$2.65Analyst Report
Weyerhaeuser stock logo
WY
Weyerhaeuser
$29.98
-2.2%
31.23$22.40 billion5.79 million3.35 million2.54%$0.76
SBA Communications Co. stock logo
SBAC
SBA Communications
$198.24
-1.0%
42.63$21.69 billion1.03 million716,1651.72%$3.40Positive News
Iron Mountain Incorporated stock logo
IRM
Iron Mountain
$58.64
-1.4%
45.11$17.35 billion2.02 million1.60 million4.43%$2.60Short Interest ↑
Alexandria Real Estate Equities, Inc. stock logo
ARE
Alexandria Real Estate Equities
$98.18
-1.9%
29.13$16.99 billion1.46 million1.14 million5.05%$4.96News Coverage
Ventas, Inc. stock logo
VTR
Ventas
$41.34
-1.9%
217.59$16.95 billion1.95 million1.97 million4.35%$1.80Positive News
Mid-America Apartment Communities, Inc. stock logo
MAA
Mid-America Apartment Communities
$127.30
-1.0%
24.86$15.01 billion685,131617,3134.40%$5.60Analyst Report
Sun Communities, Inc. stock logo
SUI
Sun Communities
$115.89
-2.1%
62.98$14.72 billion1.40 million707,6813.21%$3.72Analyst Downgrade
News Coverage
Essex Property Trust, Inc. stock logo
ESS
Essex Property Trust
$208.85
-1.5%
25.41$13.61 billion322,123392,9124.42%$9.24Analyst Report
Short Interest ↓
Positive News
American Homes 4 Rent stock logo
AMH
American Homes 4 Rent
$33.10
-1.8%
33.78$12.20 billion2.14 million1.84 million2.66%$0.88Short Interest ↑
Gaming and Leisure Properties, Inc. stock logo
GLPI
Gaming and Leisure Properties
$44.91
-1.4%
15.54$11.96 billion1.40 million4.04 million6.50%$2.92Short Interest ↑
UDR, Inc. stock logo
UDR
UDR
$35.14
-1.5%
26.22$11.75 billion2.51 million2.02 million4.78%$1.68Analyst Report
Equity LifeStyle Properties, Inc. stock logo
ELS
Equity LifeStyle Properties
$62.36
-2.1%
40.76$11.62 billion1.25 million1.19 million2.87%$1.79Positive News
W. P. Carey Inc. stock logo
WPC
W. P. Carey
$53.48
-1.1%
14.98$11.57 billion2.35 million1.89 million8.00%$4.28Analyst Report
Host Hotels & Resorts, Inc. stock logo
HST
Host Hotels & Resorts
$15.92
-0.9%
15.16$11.44 billion6.16 million6.18 million4.52%$0.72Analyst Report
News Coverage
Kimco Realty Corp stock logo
KIM
Kimco Realty
$17.09
-2.8%
28.02$10.90 billion6.00 million4.58 million5.38%$0.92Analyst Report
Rexford Industrial Realty, Inc. stock logo
REXR
Rexford Industrial Realty
$48.73
-1.3%
49.22$10.19 billion1.01 million1.33 million3.12%$1.52Positive News
Regency Centers Co. stock logo
REG
Regency Centers
$58.07
-2.3%
27.14$10.16 billion736,075878,5704.48%$2.60
Camden Property Trust stock logo
CPT
Camden Property Trust
$93.03
-1.6%
48.45$10.10 billion488,377602,7914.30%$4.00Positive News
Healthpeak Properties, Inc. stock logo
PEAK
Healthpeak Properties
$17.81
-3.0%
18.36$10.04 billion4.12 million3.98 million6.74%$1.20Positive News
Boston Properties, Inc. stock logo
BXP
Boston Properties
$57.46
-3.4%
13.58$9.33 billion1.66 million1.35 million6.82%$3.92Short Interest ↓
Annaly Capital Management, Inc. stock logo
NLY
Annaly Capital Management
$18.33
-2.6%
N/A$9.29 billion5.48 million3.68 million14.19%$2.60Positive News
Sino Land Company Limited stock logo
SNLAY
Sino Land
$5.68
+2.1%
N/A$9.10 billion4,2828012.99%$0.17Dividend Increase
Positive News
High Trading Volume
CubeSmart stock logo
CUBE
CubeSmart
$37.51
-1.6%
21.81$8.57 billion1.12 million1.50 million5.23%$1.96
Lamar Advertising stock logo
LAMR
Lamar Advertising
$80.77
-3.2%
19.65$8.51 billion401,071426,9196.19%$5.00
Americold Realty Trust, Inc. stock logo
COLD
Americold Realty Trust
$29.59
-2.7%
N/A$8.22 billion1.51 million1.25 million2.97%$0.88Positive News
Omega Healthcare Investors, Inc. stock logo
OHI
Omega Healthcare Investors
$32.61
-1.7%
31.97$8.12 billion1.72 million1.86 million8.22%$2.68Positive News
EastGroup Properties, Inc. stock logo
EGP
EastGroup Properties
$164.32
-1.3%
43.82$7.56 billion173,913251,4163.09%$5.08Short Interest ↓
News Coverage
Federal Realty Investment Trust stock logo
FRT
Federal Realty Investment Trust
$88.51
-2.3%
18.99$7.39 billion482,694459,5814.93%$4.36Short Interest ↑
Analyst Revision
News Coverage
Positive News
NNN REIT, Inc. stock logo
NNN
NNN REIT
$34.91
-1.2%
17.11$6.45 billion1.75 million1.40 million6.47%$2.26Short Interest ↑
First Industrial Realty Trust, Inc. stock logo
FR
First Industrial Realty Trust
$46.77
-1.7%
19.57$6.29 billion782,023836,0452.74%$1.28Analyst Report
News Coverage
Positive News
Brixmor Property Group Inc. stock logo
BRX
Brixmor Property Group
$20.15
-3.0%
17.22$6.25 billion1.80 million2.38 million5.16%$1.04Positive News
STAG Industrial, Inc. stock logo
STAG
STAG Industrial
$33.90
-1.8%
31.10$6.20 billion734,3601.02 million4.34%$1.47Positive News
Starwood Property Trust, Inc. stock logo
STWD
Starwood Property Trust
$18.89
-2.4%
10.79$6.05 billion1.88 million2.40 million10.17%$1.92
Healthcare Realty Trust Incorporated stock logo
HR
Healthcare Realty Trust
$14.86
-2.7%
N/A$5.82 billion2.96 million2.54 million8.35%$1.24Positive News
AGNC Investment Corp. stock logo
AGNC
AGNC Investment
$9.11
-3.5%
N/A$5.72 billion13.88 million11.60 million15.81%$1.44Positive News
Agree Realty Co. stock logo
ADC
Agree Realty
$53.86
-2.5%
30.60$5.32 billion1.07 million732,1315.42%$2.92Short Interest ↓
Positive News
Ryman Hospitality Properties, Inc. stock logo
RHP
Ryman Hospitality Properties
$83.67
+0.5%
20.97$4.97 billion410,907456,1794.78%$4.00Analyst Report
Kite Realty Group Trust stock logo
KRG
Kite Realty Group Trust
$20.95
-2.2%
174.60$4.70 billion1.25 million1.26 million4.58%$0.96Short Interest ↓
Positive News
Apartment Income REIT Corp. stock logo
AIRC
Apartment Income REIT
$30.14
-1.8%
14.42$4.58 billion1.06 million715,1725.97%$1.80News Coverage
Rithm Capital Corp. stock logo
RITM
Rithm Capital
$9.29
7.09$4.49 billion3.75 million3.64 million10.77%$1.00Analyst Report
News Coverage
Vornado Realty Trust stock logo
VNO
Vornado Realty Trust
$22.00
-3.0%
N/A$4.32 billion2.75 million3.01 million4.09%$0.90Positive News
Rayonier Inc. stock logo
RYN
Rayonier
$27.61
-3.0%
50.20$4.22 billion372,970739,7174.13%$1.14Analyst Downgrade
Short Interest ↑
Phillips Edison & Company, Inc. stock logo
PECO
Phillips Edison & Company, Inc.
$32.95
-1.8%
71.63$3.94 billion636,766725,9783.55%$1.17
Blackstone Mortgage Trust, Inc. stock logo
BXMT
Blackstone Mortgage Trust
$21.21
-2.5%
13.60$3.75 billion3.13 million4.56 million11.69%$2.48Short Interest ↑
Positive News
ETFMG Real Estate Tech ETF stock logo
HHH
ETFMG Real Estate Tech ETF
$71.91
-3.0%
29.84$3.71 billion316,143156,881N/AN/ANews Coverage
Positive News
High Trading Volume
Kilroy Realty Co. stock logo
KRC
Kilroy Realty
$31.04
-1.8%
14.92$3.70 billion1.17 million1.16 million6.96%$2.16Insider Selling
News Coverage
Positive News
PotlatchDeltic Co. stock logo
PCH
PotlatchDeltic
$45.40
+0.0%
38.80$3.63 billion329,902331,0643.96%$1.80
Apple Hospitality REIT, Inc. stock logo
APLE
Apple Hospitality REIT
$15.27
-0.5%
21.81$3.51 billion2.69 million4.90 million6.29%$0.96
Granite Real Estate Inc. Staple stock logo
GRP.U
Granite Real Estate Inc. Staple
$52.54
-1.0%
N/A$3.38 billion2,3551,5544.51%$2.37
Essential Properties Realty Trust, Inc. stock logo
EPRT
Essential Properties Realty Trust
$21.15
-2.2%
18.39$3.37 billion1.89 million1.33 million5.30%$1.12Positive News
Medical Properties Trust, Inc. stock logo
MPW
Medical Properties Trust
$5.23
-4.0%
47.55$3.26 billion11.36 million13.09 million11.47%$0.60
Sabra Health Care REIT, Inc. stock logo
SBRA
Sabra Health Care REIT
$13.64
-2.2%
N/A$3.22 billion2.58 million2.87 million8.80%$1.20Positive News
Independence Realty Trust, Inc. stock logo
IRT
Independence Realty Trust
$13.78
-2.1%
44.45$3.16 billion1.49 million2.19 million4.64%$0.64Short Interest ↓
EPR Properties stock logo
EPR
EPR Properties
$41.05
-1.2%
21.95$3.13 billion686,953546,7888.04%$3.30
Cousins Properties Incorporated stock logo
CUZ
Cousins Properties
$19.99
-1.9%
20.19$3.09 billion1.77 million1.59 million6.40%$1.28Short Interest ↑
Physicians Realty Trust stock logo
DOC
Physicians Realty Trust
$11.63
-2.7%
27.69$2.91 billion2.06 million1.77 million7.91%$0.92Positive News
DigitalBridge Group, Inc. stock logo
DBRG
DigitalBridge Group
$16.85
-4.2%
N/A$2.86 billion1.95 million1.57 million0.24%$0.04
National Storage Affiliates Trust stock logo
NSA
National Storage Affiliates Trust
$31.08
-2.1%
29.88$2.83 billion690,865891,0117.21%$2.24
Arbor Realty Trust, Inc. stock logo
ABR
Arbor Realty Trust
$14.41
-5.1%
8.38$2.83 billion3.55 million2.21 million11.94%$1.72Positive News
COPT Defense Properties stock logo
CDP
COPT Defense Properties
$23.51
-1.3%
13.91$2.68 billion659,7451.18 million4.85%$1.14Analyst Report
News Coverage
Broadstone Net Lease, Inc. stock logo
BNL
Broadstone Net Lease
$14.33
+0.2%
16.10$2.68 billion1.62 million910,3007.82%$1.12Short Interest ↑
LXP Industrial Trust stock logo
LXP
LXP Industrial Trust
$8.78
-1.4%
41.79$2.60 billion2.50 million1.84 million5.70%$0.50Positive News
SITE Centers Corp. stock logo
SITC
SITE Centers
$12.10
-1.9%
24.69$2.58 billion1.22 million1.48 million4.30%$0.52
SL Green Realty Corp. stock logo
SLG
SL Green Realty
$36.04
-3.4%
N/A$2.40 billion1.53 million1.93 million9.02%$3.25
Tanger Factory Outlet Centers, Inc. stock logo
SKT
Tanger Factory Outlet Centers
$22.33
-1.2%
26.90$2.38 billion664,857685,8764.39%$0.98Positive News
The Macerich Company stock logo
MAC
Macerich
$10.81
-0.9%
N/A$2.35 billion2.40 million1.31 million6.29%$0.68Analyst Upgrade
News Coverage
Gap Up
Hannon Armstrong Sustainable Infrastructure Capital, Inc. stock logo
HASI
Hannon Armstrong Sustainable Infrastructure Capital
$19.67
-7.2%
35.13$2.27 billion2.86 million3.07 million8.03%$1.58Short Interest ↑
National Health Investors, Inc. stock logo
NHI
National Health Investors
$51.06
-0.6%
20.18$2.23 billion221,247130,3437.05%$3.60Analyst Upgrade
Highwoods Properties, Inc. stock logo
HIW
Highwoods Properties
$20.04
-2.8%
13.92$2.18 billion1.13 million2.07 million9.98%$2.00Short Interest ↑
Douglas Emmett, Inc. stock logo
DEI
Douglas Emmett
$12.35
-3.2%
37.43$2.13 billion2.32 million2.34 million6.15%$0.76Positive News
CareTrust REIT, Inc. stock logo
CTRE
CareTrust REIT
$20.13
-1.8%
57.50$2.04 billion1.43 million1.32 million5.57%$1.12Positive News
Equity Commonwealth stock logo
EQC
Equity Commonwealth
$18.24
-0.7%
32.00$2.02 billion1.02 million962,082N/AN/A
Four Corners Property Trust, Inc. stock logo
FCPT
Four Corners Property Trust
$22.05
-0.6%
19.86$2.01 billion812,371472,6606.17%$1.36News Coverage
Positive News
Ready Capital Co. stock logo
RC
Ready Capital
$9.90
-2.1%
3.75$1.74 billion1.42 million1.27 million14.55%$1.44
DiamondRock Hospitality stock logo
DRH
DiamondRock Hospitality
$8.07
+0.5%
20.69$1.68 billion3.03 million2.56 million1.49%$0.12Short Interest ↓
Positive News
OUTFRONT Media Inc. stock logo
OUT
OUTFRONT Media
$9.60
-5.0%
N/A$1.67 billion6.64 million3.72 million12.50%$1.20
Pebblebrook Hotel Trust stock logo
PEB
Pebblebrook Hotel Trust
$13.41
-1.4%
N/A$1.64 billion2.61 million1.73 million0.30%$0.04Positive News
InvenTrust Properties Corp. stock logo
IVT
InvenTrust Properties
$23.27
-2.3%
387.90$1.61 billion202,297217,4603.70%$0.86Positive News
Retail Opportunity Investments Corp. stock logo
ROIC
Retail Opportunity Investments
$12.00
-3.1%
32.43$1.56 billion996,9421.16 million5.00%$0.60Positive News
RLJ Lodging Trust stock logo
RLJ
RLJ Lodging Trust
$9.78
-0.1%
30.56$1.54 billion1.49 million1.85 million4.09%$0.40Positive News
Veris Residential, Inc. stock logo
VRE
Veris Residential
$16.16
-2.1%
N/A$1.52 billion453,322634,5200.31%$0.05News Coverage
JBG SMITH Properties stock logo
JBGS
JBG SMITH Properties
$14.06
-2.8%
N/A$1.50 billion1.34 million1.31 million6.40%$0.90Short Interest ↓
Apollo Commercial Real Estate Finance, Inc. stock logo
ARI
Apollo Commercial Real Estate Finance
$9.85
-2.8%
12.79$1.43 billion1.05 million847,71514.22%$1.40Short Interest ↓
Positive News
Acadia Realty Trust stock logo
AKR
Acadia Realty Trust
$14.02
-2.3%
N/A$1.37 billion751,718872,4645.14%$0.72News Coverage
LTC Properties, Inc. stock logo
LTC
LTC Properties
$31.50
-2.0%
18.42$1.33 billion265,332266,1237.24%$2.28Analyst Report
Ladder Capital Corp stock logo
LADR
Ladder Capital
$9.92
-3.3%
8.86$1.30 billion540,489449,0839.27%$0.92Positive News
Empire State Realty Trust, Inc. stock logo
ESRT
Empire State Realty Trust
$7.87
-2.1%
27.14$1.30 billion848,5031.19 million1.78%$0.14Positive News
Do Real Estate Investment Trusts Deserve a Place in Your Portfolio?

REITs have many attractive features, but they’re not for every investor

A Real Estate Investment Trust (or REIT) is made up of a number of real estate companies that own a portfolio of income-producing real estate assets. Investing in a REIT allows these investors to earn a share of the income that these assets produce.

For a company to be considered a REIT, it must meet many specific requirements. These requirements, which were established by Congress when they created the concept of a REIT in 1960, help ensure that investors can maximize the income generating aspect of a REIT.

In this article, we’ll look at REIT ETFs as an investment decision. For those investors who are unfamiliar with what REITs are, we’ll define what a REIT is as well as look at give a basic overview of what an ETF is. As the article goes on, we’ll put the two together to show why a REIT ETF can give investors the advantages of investing in real estate with less risk.

In 1960, Congress established a financial product that would allow individual investors to invest in real estate without having to buy or finance property. Real estate investment trusts are divided into two categories: equity REITs and mortgage REITs.

  • Equity REITs: These companies invest in a variety of commercial properties such as offices, shopping malls, apartments, and hotels. The primary income source for these REITs comes through the income they receive from rent. Equity REITs currently make up the majority of the REIT market with more than $2 trillion of assets under management. Avalon Bay Communities (NYSE: AVB) is an example of an equity REIT.
  • Mortgage REITs: In contrast to equity REITs, these companies are composed of more residential than commercial properties and most of their income is derived from mortgages and mortgage-backed securities. Mortgage REITs (or mREITs) profit from the spread between the interest rates they earn from their mortgage loans and the rates they are changed for their short-term borrowing. For example, let’s look at a mortgage REIT that purchases a 15-year mortgage that pays them 3% interest per year. If their short-term borrowing cost is 2% per year, than they will have a difference, or spread of 1% that represents their profit. New York Mortgage Trust (NASDAQ: NYMT) is an example of a mortgage REIT.

REITs can be publicly listed and publicly traded in the stock market, publicly listed (but not publicly traded), or privately listed. REITs must follow specific rules that make them an attractive investment. To begin with, REITs are modeled after mutual funds in the sense that every REIT contains a “basket” of properties. The Internal Revenue Service (IRS) treats a REIT like a corporation. Shares in a REIT must be widely held by shareholders and the REIT itself must primarily own or finance real estate. In addition, their real estate holding must have a long-term investment outlook.

Some additional rules that govern REITs include:

  • At least 75% of their income must be earned from real estate as rent, interest, or the sale of real estate assets.
  • At least 75% of their assets must be in real estate.
  • At least 95% of their income must be passive.
  • At least 90% of their taxable income must be distributed to shareholders as dividends (a REIT has no retained earnings). All dividends are taxed at ordinary rates.

Read more: 7 Best Hotel REITs to Buy Now, 7 Best Industrial REITs to Buy Now and 5 Best Office REITs to Buy Now.

  • Dividend income: Because of the rules that govern REITs, investors are assured of a dividend payout that is higher in proportion to other stocks. Financial advisors will often recommend a REIT to their income-oriented clients because the dividend yields have historically been higher then stocks on the S&P 500 index.
  • Diversification: REITs have a historically low correlation with other asset classes like stocks and bonds. This means that when stocks and bonds are undergoing a correction, REITs generally may do well. However, to maximize the benefits of diversification, investors should look to invest in a variety of REITs so as to get diversification not only between asset classes but also within an asset class.
  • Inflation hedging: Equity REITs, in particular, have demonstrated an ability to generate increased revenue – from rent for example – even during periods when inflation is on the rise. This means that investors who are looking for an income that will provide reliable income that can help sustain a longer retirement timeline.
  • Total return performance: In addition to issuing regular dividends, REITs have a proven history of long-term capital appreciation. In fact over the past half century, REITs have outperformed the broader stock market as well as other assets.
  • Liquidity and transparency: Because they trade on stock exchanges, REITs offer the same liquidity as other stocks. And because those that are publicly traded are registered and regulated by the SEC, investors are assured that the companies are subject to the SEC standards for corporate governance, financial reporting and information disclosure.

A real estate investment trust (REIT) is an attractive option for investors who want to get the benefits of investing in real estate without owning property. However, just like the housing market, a REIT can be subject to the volatility of the stock market.

And by combining the popularity of exchange-traded funds (ETFs) with an investment in REIT stocks, investors can get the benefits of REIT stocks with much lower risk. With a REIT ETF, investors can own a diverse group of properties inside of a fund that is traded in the same way that they would buy and sell shares on a stock exchange. REIT ETF investors also benefit from the high dividend yields that REIT ETFs generate.

Like any ETF investors should pay close attention to the ETF’s prospectus for information regarding who manages the fund, the fees and expenses associated with the fund, whether the fund is actively or passively managed, and the overall investment philosophy of the fund before deciding whether to invest. A REIT ETF carries the same risks, although perhaps moderated, as other real estate investments. The most notable threat to the profitability of an ETF is rising interest rates.

An exchange-traded fund (ETF) is one of many financial products that serve as a vehicle for investing in REITs. In contrast to a mutual fund which reconciles share price once a day based on the fund’s closing price, shares of an ETF trade like common stock on an exchange, meaning the market price will go up or down throughout a trading session as shares are bought and sold.

An ETF generally trades with a higher daily volume than a mutual fund and has lower fees and expenses which can make them more attractive for investors. Like a publicly traded company that sells shares on a stock exchange, a company that manages an ETF is required to disclose information about the fund to the public.

A REIT ETF is an exchange-traded fund that is exclusive to REIT stocks. As an investor, REIT funds are an ideal vehicle to use a low-cost investment vehicle to gain exposure to a diverse range of properties. As with any investment, investors should take care to perform their due diligence before deciding to invest money in a REIT ETF.

  • Know who manages the ETF – in many cases, REIT ETFs are issued by well-known investment firms that have earned the trust of investors. However, as ETFs have become increasingly popular, there are more companies that are ETFs being created. Just because a company is not well-known does not make it a bad investment, it just means that investors may have to perform more research before making an investment.
  • Know the fee structure – Although most ETFs charge lower fees and expenses than a mutual fund there are exceptions. The best way to compare the fees and expenses of an ETF is similar how you would compare any asset class. Look at the prospectus of the REIT you are considering along with the prospectus of REIT ETFs that share a similar portfolio of assets.
  • Know your risk tolerance – REIT ETFs help manage the risk that can come from owning real estate. They cannot, however, eliminate all risk. As should be expected, REIT ETFs are subject to the same market forces that affect the real estate market. They are extremely sensitive to interest rates as well as employment rates.

There are currently more than 200 REIT ETFs for investors to choose from. REIT ETFs are beginning to figure prominently in the 401(k) plans. However, like other investment vehicles, not all ETFs are the same. To have success, investors should understand what the investment philosophy of the ETF is and match that to their personal risk tolerance.

Like any mutual fund, portfolio managers can get very niche driven which can add more risk to the ETF than investors are comfortable with. You should also be sure to know if the fund is actively managed or passively managed.

In an actively managed ETF, a portfolio manager selects the REIT stocks that make up the fund and will actively buy and sell stocks to generate a higher total return. In a passively managed fund, the portfolio manager seeks stocks that track an index. The Financial Times Stock Exchange (FTSE) Nareit Index tracks the performance of the U.S. REIT industry and the Global REIT market.

Finally, investors should look for diversification. This means looking at U.S. REIT ETFs as well as the global REIT ETF market.

One of the most important strategies for investment success is the ability to profit in any market condition. Investors have long understood the value of real estate as an investment vehicle. However, property ownership was, and in some cases still is, a barrier of entry for all but institutional investors.

That was one of the reasons Congress established the concept of a real estate investment trust (REIT) that would give individual investors an opportunity to invest in real estate without owning residential or commercial real estate. Just like the housing market, a REIT can be subject to the volatility of the stock market. However, REITs have several rules in place that make them an attractive investment option. When you combine those rules with the benefits of an exchange-traded fund (ETF), REITs can be an attractive alternative for income-oriented investors in any market.

For income investors, a REIT EFT can help produce regular and predictable income even in times of low interest rates. A REIT ETF provides the ability for investors to gain exposure to and profit in the real estate market without owning property. Owning shares of a REIT ETF is similar to buying shares of a REIT stock with the exception that investors have more diversification because they are purchasing a basket of companies rather than tying their investment to a specific REIT stock.

One of the most important benefits of a REIT ETF is regular dividend distributions along with some capital appreciation that can lead to a total return that, while not as high as if the investor-owned the underlying properties comes with significantly lower risk. Like the real estate market in general, REIT ETFs can be sensitive to fluctuations in interest rates.



More Stock Ideas from MarketBeat

My Account -