If there’s anything The Oxford Club preaches, it’s the importance of a diversified portfolio to lower your risk. Commodities, exchange-traded funds (ETFs) and other assets are just a few of the many ways to branch out from regular stocks.
But today, we’re talking real estate – which should ideally comprise 5% of your portfolio. (Don’t worry, we’re not talking about flipping homes or renting out that trapezoidal stairwell cupboard to a fresh-faced college grad.)
No, if you’re anxious about dipping your toes into real estate, look no further than REITs.
REITs, or real estate investment trusts, are companies that own various forms of real estate. They must pay out 90% of their profits in dividends.
You can comfortably earn juicy 5%, 6% or even 7% yields on REITs – all without holding on to physical real estate and the associated headaches.
But to maximize those yields and slip Uncle Sam’s grubbing fingers, you need to know how to navigate REIT taxes. Join Chief Income Strategist Marc Lichtenfeld as he uses this week’s episode of State of the Market to discuss the tax implications of owning REITs and how to maximize your returns.
Notably, he reveals a way for certain investors to deduct up to 20% of their REIT dividends from their taxable income.
To see whether you qualify for this deduction and to learn how to use it, tune in to this week’s episode of State of the Market.