Will Net Lease REITs Survive Inflation?
Slow and steady wins the race is an often-repeated maxim. While not the right way to invest for everyone, buying reliable, boring companies is a good way for most investors to achieve long-term success. Real estate investment trusts (REITs) were pretty much tailor-made to be tortoises, which is why some consider them bond alternatives. That's particularly true of the net lease sector, in which tenants bear most of the operating expenses of occupying a property. But there's a key difference between a bond and a REIT. With inflation on the rise, it's going to be increasingly important to watch this industry metric.
In a diversified portfolio, bonds are generally meant to provide safety and stability. This is because they are basically a contract between the seller and buyer that guarantees -- as best you can in finance -- the seller will return the cash when the bond matures and make regular interest payments until that point. The payments, normally, are preset.
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Source Fool.com
