3 Easy Steps to Start Investing in REITs
Real estate investment trusts (REITs) have grown increasingly popular over the past decade -- for good reason. These companies, which invest in real estate and real estate-related securities, are required to follow strict rules when it comes to their holdings, including paying 90% of taxable income in the form of dividends to shareholders in order to benefit from certain tax advantages.
This means REITs' unique structure can offer investors higher-than-average dividend payments, diversification, and exposure to high-quality real estate investments that would otherwise be inaccessible. Historically, REITs have outperformed the S&P 500 over the past 20 years, with last year's return for all REITs, as tracked by the National Association of Real Estate Investment Trusts (Nareit), close to 16 percentage points higher than the S&P 500 return, at a whopping 29%.
When it comes to real estate investing, there truly is no other investment strategy that offers the same ease and accessibility as investing in REITs. If you're looking to expand your portfolio by investing in REITs this year, here are three easy steps to get started.
Source Fool.com
