REIT stocks
See our pricing table.
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What is a REIT?
REITs or real estate investment trusts are companies that own or operate income-producing real estate, such as retail buildings, warehouses, apartments, data centres, infrastructure or hotels. A REIT can focus on one type of real estate property or cover a mix of properties in their portfolio.
This type of investment asset can provide retail investors with a great way to diversify their portfolios and invest in residential or commercial real estate without the hassle of buying and managing the properties themselves.
Advantages
- They can provide regular dividend income. REITs have to pay out 90% of their profits in the form of dividends to their investors.
- Due to their lower correlation with the rest of the equity market, they can help diversify your portfolio.
- They are a much more liquid investment compared to investing directly in property.
- REITs have the potential to provide total return on investment.
Disadvantages
- Like any other stock market investments their value can go down as well as up.
- They can be massively impacted by real estate prices, which also tend to be correlated with the health of the economy.
- Even if REITs are exempt from corporate income tax, investors still need to pay tax on dividends, if they are not kept in a tax wrapper.
- Not suited for short term investment. REITs prices can be influenced by many factors over the short term, interest rates being one of these factors.