Real Estate Investment Trusts (REITs) offer an economical way to invest in the housing market. They have attractive total return potential, with high and consistent dividend income and long-term capital appreciation. REITs also have a low correlation with other assets, making them an excellent portfolio diversifier that can help reduce overall portfolio risk and increase profitability. Investing in REITs is an excellent alternative to owning real estate directly.
It requires much less capital to invest, can be easily traded as a stock, and can be a good way to diversify an investment portfolio. REITs produce no current income, but they provide a continuous stream of rental income. In addition, they are a liquid investment that diversifies into a variety of real estate properties in a variety of geographical locations. On the other hand, owning physical real estate, such as a single-family rental property, offers numerous tax advantages and allows the investor to potentially benefit from rental income and increased property value in the long term.
Financial advisors suggest that between 10% and 26% of their investments should be in real estate. The federal government made it possible for investors to purchase large-scale commercial real estate projects as early as 1960. There are more than 200 publicly traded REITs in the market, according to the National Association of Real Estate Investment Trusts (Nareit). When considering an investment in retail real estate, one must first examine the retail industry itself.
Nareit's ReitWorks is an educational conference where industry professionals will have the opportunity to learn about the latest ESG developments impacting the real estate sector.In conclusion, investing in REITs is an excellent way to gain exposure to real estate with very little money. It can add stability and diversity to your overall investment portfolio. REITs offer an economical way to invest in the housing market with attractive total return potential, high and consistent dividend income, and long-term capital appreciation.