How do REITs compare to other investments?

What are REITs and how do they work?

REITs, or Real Estate Investment Trusts, are companies that own, operate, or finance income-producing real estate. They allow investors to earn a share of the income produced through commercial real estate ownership without actually having to buy, manage, or finance any properties.

How do REITs compare to stocks?

REITs often provide higher dividend yields compared to stocks, as they are required to distribute at least 90% of their taxable income to shareholders. However, stocks can offer more growth potential, while REITs provide more stability and income.

What about bonds? Are REITs safer?

REITs are generally considered riskier than bonds because they are subject to market fluctuations and economic conditions. Bonds typically offer fixed returns and are less volatile, but REITs can provide higher returns over the long term.

What should I consider before investing in REITs?

Consider factors like the type of REIT (equity, mortgage, hybrid), the quality of the properties, management team, market conditions, and your own investment goals and risk tolerance.