REITs

To put things in perspective, the S&P 500’s average dividend yield is 1.9 percent. In comparison, the average equity REIT (which owns real estate) pays around 5%. The average mortgage REIT (which owns mortgage-backed securities and related assets) pays a yield of roughly 10.6%. Is investing in REITs profitable? REITs have typically provided competitive total […]

To put things in perspective, the S&P 500’s average dividend yield is 1.9 percent. In comparison, the average equity REIT (which owns real estate) pays around 5%. The average mortgage REIT (which owns mortgage-backed securities and related assets) pays a yield of roughly 10.6%. Can you make good money with REITs? REITs may be a

To qualify for REIT classification and avoid paying corporate taxes, a company must meet a number of requirements. REITs must spend at least 75 percent of their assets in real estate, generate at least 75 percent of their revenue from real estate, and have at least 100 shareholders, to mention a few requirements. Any publicly

Private REITs, while they have many of the characteristics of a REIT, do not trade on a stock exchange and are not registered with the Securities and Exchange Commission in the United States (SEC). They aren’t required to give the same level of information to investors as a publicly traded firm because they aren’t registered.

A REIT is a fancy term for a tax-advantaged real estate investment trust. REITs are obligated to pay out 90% of their taxable revenue as dividends in exchange for not paying corporate tax, hence their dividends are often significantly higher than conventional firms. REITs are required by law to invest at least 75% of their

REITs (real estate investment trusts) are common financial entities that pay dividends to their shareholders. One disadvantage of non-traded REITs (those that aren’t traded on a stock exchange) is that investors may find it difficult to investigate them. Investors find it difficult to sell non-traded REITs because they have low liquidity. When interest rates rise,

REIT prices tend to climb in tandem with interest rates during periods of economic expansion. The rationale behind this is that as the value of their underlying real estate assets rises, so does the value of REITs. As the economy grows, so does the demand for funding, resulting in higher interest rates. In a declining

REITs, like any other business, require capital. An IPO (initial public offering) is how a publicly traded REIT (real estate investment trust) accomplishes this. This is similar to selling any other stock to the general public, who are investing in the company’s income-producing real estate. People who purchase initial public offerings (IPOs) are investing in

Some people are wary of REITs because they have a funny name and sound sophisticated. REITs were “created by Congress to make real estate incomprehensible,” according to financial author Roger Lowenstein. He was simply slightly exaggerating his point. Then there’s the issue of pronunciation. REIT is a terrible little term that rhymes with street. You’ll

Mortgage REITs (mREITS) purchase or originate mortgages and mortgage-backed securities (MBS) and earn income from the interest on these investments to fund income-producing real estate. Are mortgage REITs good? When the spread between short-term and long-term interest rates (where they borrow) is substantial, mREITs can produce a significant net interest margin (where they lend). Unfortunately,