What Is REITs Stock
A real estate investment trust (REIT) is a type of company that owns or finances income-generating real estate properties, such as shopping malls, apartment buildings, hotels, or office spaces. REITs operate similarly to mutual funds, as they pool money from individual investors to invest in a diversified portfolio of properties.
It is mandatory for REITs to:
- Invest at least 75% of their total assets in real estate, cash, or US treasuries.
- Distribute at least 90% of their taxable income to shareholders as dividends.
REITs have been around in the United States for over 50 years and REITs performed with an average annual return of 11.26% between 1972 and 2022.
Types of REITs
Real Estate Investment Trusts (REITs) come in different types – Each specializing in a specific category of income-generating real estate, from residential and commercial properties to infrastructure assets. By investing in REITs, investors can diversify their portfolios and potentially earn income through passive real estate investments.
- Equity REITs: Own properties and earn money from renting them out.
- Mortgage REITs: Invest in mortgages and make money from interest on their investments.
- Retail REITs: Own retail properties like malls and stores.
- Residential REITs: Own residential properties such as apartments and student housing.
- Healthcare REITs: Specialize in healthcare properties like hospitals and care homes.
- Office REITs: These are focused on mainly office spaces and buildings.
- Industrial REITs: Own industrial properties like warehouses and distribution centers.
- Infrastructure REITs: These REITs are especially for infrastructure properties like Toll roads, bridges, energy pipelines, telecommunication towers, etc.
REIT’s Performance: Historical Returns
| Index | Average Return (1972-2022) |
|---|---|
| FTSE Nareit All REITs | 11.26% |
| FTSE Nareit Composite | 11.24% |
| FTSE Nareit All Equity REITs | 12.76% |
| FTSE Nareit Equity REITs | 12.63% |
| FTSE Nareit Mortgage REITs | 8.26% |
REITs are a popular choice for investors seeking reliable income and diversification through alternative assets. The performance of REITs depends on factors such as property features and risks. By understanding these factors, investors can make informed decisions to maximize their returns.
Top 30 REITs Stock List (2023)
(Reit Stock list By Market Cap)
| Company | Marketcap | Dividend Yield | Price | State |
|---|---|---|---|---|
| Prologis, Inc. | 106.2B | 3.0% | $114.9 | CA |
| American Tower Corporation (REI | 97.3B | 3.1% | $208.8 | MA |
| Equinix, Inc. | 76.5B | 1.6% | $815.0 | CA |
| Crown Castle Inc. | 50.9B | 5.4% | $117.3 | TX |
| Public Storage | 45.6B | 4.3% | $258.8 | CA |
| Realty Income Corporation | 39.1B | 5.7% | $54.0 | CA |
| Welltower Inc. | 49.3B | 2.8% | $89.1 | OH |
| Simon Property Group, Inc. | 46.9B | 6.0% | $124.9 | IN |
| VICI Properties Inc. | 30.9B | 1.3% | $29.9 | |
| SBA Communications Corporation | 26.6B | 1.3% | $247.0 | FL |
| Digital Realty Trust, Inc. | 42.9B | 3.5% | $138.8 | TX |
| AvalonBay Communities, Inc. | 24.6B | 3.8% | $172.9 | VA |
| Equity Residential | 21.6B | 4.6% | $56.8 | IL |
| Weyerhaeuser Company | 22.9B | 2.4% | $31.4 | WA |
| Alexandria Real Estate Equities | 19.0B | 4.5% | $109.4 | |
| Extra Space Storage Inc | 28.4B | 4.9% | $130.2 | |
| Invitation Homes Inc. | 20.5B | 3.2% | $33.4 | |
| 0.0000 | 0% | $0.0000 | ||
| Ventas, Inc. | 18.4B | 4.0% | $45.8 | |
| Mid-America Apartment Communiti | 14.9B | 4.4% | $124.5 | |
| Sun Communities, Inc. | 16.8B | 2.9% | $129.3 | |
| W. P. Carey Inc. REIT | 13.6B | 6.9% | $62.2 | |
| Iron Mountain Incorporated (Del | 18.7B | 4.0% | $64.2 | |
| Essex Property Trust, Inc. | 14.2B | 4.3% | $213.5 | |
| UDR, Inc. | 11.9B | 4.9% | $33.4 | |
| Gaming and Leisure Properties, | 12.5B | 6.3% | $46.7 | |
| Equity Lifestyle Properties, In | 13.9B | 2.5% | $71.1 | |
| American Homes 4 Rent | 15.0B | 2.3% | $36.3 | |
| Host Hotels & Resorts, Inc. | 12.5B | 3.3% | $17.5 | |
| Kimco Realty Corporation (HC) | 12.0B | 4.8% | $19.3 |
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REIT FAQ’s
REITs are large industries that have been around for over 50 years. What differentiates REITs from other funds is these companies invest a minimum of 75% of their assets in real estate, cash, or US treasuries. and distribute a minimum of 90% of their taxable income to shareholders in the form of dividends.
If you’re looking for a safe investment in real estate, REIT shares are a good option. They’re easy to buy and sell on the open market. You should check out the dividend yield of any REIT share before investing.
To qualify as a Real Estate Investment Trust (REIT) a company must:
1. Invest at least 75% of its total assets in real estate.
2. Derive at least 75% of its gross income from rents from real property, and interest on mortgages.
3. Financing real property, or from sales of real estate.
4. Pay at least 90% of its taxable income in the form of shareholder dividends each year.
5. Be an entity that is taxable as a corporation.
6. Be managed by a board of directors or trustees.
7. Have a minimum of 100 shareholders.
8. Have no more than 50% of its shares held by five or fewer individuals.
Yes! REITs Pay at least 90% of their taxable income in the form of shareholder dividends each year.
There are more than 1,100 U.S. REITs registered with the IRS that have filed tax returns. These include 225 that trade on one of the major stock exchanges.
Most REITs are safe investments but not all. Because many REITs have cut or suspended their dividends because they couldn’t withstand the financial volatility of the market. Also, whenever interest rates rise, REITs have the risk of losing value. So read the document and risk factors before investing.
Disclaimer ✋
The information included on this site is for educational purposes only and is not intended to be a substitute for investment advice.
Data on past performance, where given, is not necessarily a guide to future performance. So before investing you should carefully consider the Fund’s investment objectives, risks, charges, and expenses.
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