REITs (real estate investment trusts) are excellent investments. They are relatively safe and pay relatively high dividends. All REITs are companies that invest in real estate. This could be residential, industrial, retail, lodging, healthcare, self-storage, data centers, mortgages, and others. They must pay at least 90% of their taxable income in the form of shareholder dividends each year to qualify as REITs. They are a very safe investment but their dividends are higher than Treasury Bonds, CDS or most stocks. You do have to be a little cautious. The major REITs do not pay dividends as high as some of the lesser REITs.
I always check Nareit to see which are the best at https://www.reit.com/investing/reit-directory. Then, I check Yahoo Finance to see how they have done over the past year. Nareit also gives you the dividend yield if you click on the individual stock. The dividend yield is not 90%. The reason for this is that they must distribute at least 90% of their taxable income to shareholders annually in the form of dividends. The amount that they distribute is based on their taxable income, not their gross income. So, you do need to check to see their dividend yields which, again, can be done at Nariet. Dividend yields can be as low as 2% or as high as 25% to 55%. The higher yields are usually riskier.
So, I invested $11.90 in RVI in November of 2021. On January 18, 2022, RVI paid me a dividend of $6.54. That is a 55% dividend.
Another stock that I particularly like is NYC. Schwab rated it as an F when I bought it. I didn't buy much of that originally either, $41.00 on September 20, 2021. NYC has only paid me $.50 twice, October 15, 2021 and January 18, 2022 but this REIT has grown well. It is currently almost at its all-time high. If I need to sell a stock for cash, I can do so with this one.
As we all know, real estate is skyrocketing. This is a good way to cash in on this boom.
I would caution you, as with any stock, don't just jump into REITs. Study carefully so that you know which REITs are a good investment and which aren't. I did give you most of the basics about investing in REITs.
I always keep my eye on what is going on in the U.S. usually by watching the news. An example of how important this can be is that when the pandemic started, retail establishments were closing while data centers were getting a lot more business. So, retail REITs went down while data center REITs went up. It is important to keep track of what is growing and what is losing ground.
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