Are Real Estate Investment Trusts (REITs) A Good Investment Right Now? The Pros And Cons

What Is A Real Estate Investment Trust (REIT)?

Real estate investment trusts or REITs own, operate, or finance income-producing real estate across many property sectors.

Types of REITs

Equity REITs  Equity REITs own or operate income-producing real estates like shopping malls, commercial real estate, health care facilities, apartment buildings, warehouses, office buildings, cellphone towers, and hotels.

Mortgage REITs

Mortgage REITs (mREITs) only provide financing for income-producing real estate by borrowing money at low short-term interest rates and purchase mortgages that pay more excellent long-term interest rates.

A hybrid REIT is a real estate investment trust company that effectively combines equity and mortgage REITs (mREITs).

Hybrid REITs

Public Non-listed REITs

Public non-listed REITs are registered with the SEC and are therefore regulated, but they are not traded on public exchanges.

Private REITs

Private REITs are exempt from SEC registration and whose shares do not trade on national stock exchanges.

Advantages Of Investing In REITs

If you wonder why REITs are a good investment, REITs have some essential characteristics that make them unique.

No Corporate Tax

The absence of corporate tax is a considerable advantage compared to regular stocks.

High Dividends

Since REITs are supposed to distribute 90% of their income as dividends, most REITs provide a higher dividend than other companies.

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