Investing in REITs Guide

Investing in REITs is an excellent way to diversify your portfolio without the time and expense of purchasing and managing real estate. These companies often pay high dividend yields and offer moderate long-term capital appreciation. Read more https://www.theinvestorscentre.co.uk/investing/how-to-invest-in-reits/

REITs can be publicly traded, trading on national exchanges like stocks, or private and non-traded, which can only be bought by accredited investors or through a broker who is licensed to sell them. Regardless of their legal status, REITs must maintain enough cash flow to support debt payments and continue paying out dividends. You can assess the financial health of REITs by looking at their net asset value (NAV) and debt-to-equity ratio.

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It’s also important to consider the REIT’s property types. For example, shopping mall REITs may face challenges because of the growing popularity of online shopping and declining suburban growth. REITs that invest in hotel properties, on the other hand, may be impacted by reduced business travel as companies seek to cut costs and web conferencing becomes more popular.

Another factor to consider is whether the REIT pays taxes. If it does, you’ll need to consider how its tax treatment fits into your overall investment strategy. REITs typically pay out 90% of their taxable income in dividends to investors.

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