These unique investment vehicles have been called the “transparent way of investing in real estate.”
REITs own, manage or finance any kind of property, from assisted living facilities to theme parks to grow houses for cannabis.
Under Securities and Exchange Commission guidelines, REITs must pay out 90% of their taxable income to shareholders in dividends, which makes them a great option for income investors.
As investments derived from real estate, they’re also a good inflation hedge…
During the most inflationary eight years in U.S. history, from 1974 through 1981, the consumer price index raged at 9.3%.
After adjusting for inflation, REITs produced 7% total returns, while the S&P 500 delivered a mere 0.8%, according to Forbes.
And as the chart below shows, REITs’ generous yields put them ahead of the S&P 500 in all inflation periods, even when their price returns were lower.
In fact, in all years from 1998 through 2018, with the exception of 2009 during the financial crisis, REIT dividend growth alone was more than enough to offset rises in the consumer price index.
REITs are a strong choice for any long-term investor who wants to get ahead of rising prices. To get started with three high-yielding REITS, click here now to watch this week’s video.