An Introduction to REITs
REITs can be a good source of passive income for those who need an income stream for living expenses. Some REITs can also provide capital appreciation. As an asset class, they can offer varied diversification across many sectors such as these:
Some benefits of REITs are thought to be dividends and inflation protection. This is because the underlying real estate is thought to provide an inlationary hedge. You will receive an income stream comparable to bonds and a hedge against high inflation.
The dividends of REITs have historically provided higher than average dividend yields and good growth. This is because they must pay out a high percentage of their profits to investors to keep the REIT legal structure.
With high inflation and low yields on bonds, REITs could be an attractive addition to your portfolio. You can add some portfolio diversification using REITs and gain not only access to the real estate market, but also increase your passive income flow. Unlike direct real estate investments, which can require alot of work to manage, REITs are traded on major stock exchanges and can provide liquidity when needed.
ll about supply and demand.
My 3 Picks:
Digital Realty Trust, Inc. (NYSE: DLR) is the largest global provider of cloud- and carrier-neutral data center, colocation and interconnection solutions. It is well positioned for future growth in a digial world. It also comes with a nice 2,92% dividend yield.
American Tower Corporation (NYSE: AMT) is an American real estate investment trust and an owner and operator of wireless and broadcast communications infrastructure in several countries worldwide. With the large demands on future infrastructure required for the digital world, American Towers is well positioned to take advantage of that growth.
STAG Industrial, Inc. (NYSE: STAG) is a real estate investment trust focused on the acquisition and operation of single-tenant, industrial properties throughout the United States. Providing a tasty 3,29% dividend yield and plenty of growth potential, STAG is my finanal pick. When the world economy starts rebounding from the pandemic, STAG is well positioned to take advantage.
Thanks for reading, please let me know what your top picks are in the comments and if you like REITs as an asset class or not?