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They can also appreciate in value over time.
Unlike other real estate investments, REIT investing is generally more accessible to individual investors.
This makes them cheaper to purchase.
This is primarily because of their historically solid performance.
He illustrated this with an example from the McGraw-Hill book, Invest With the Fed.
And mortgage REITs did even better, returning 22% during periods when interest rates were falling.
Returns Have Been High This Year, Too
Its not just past returns that have been high.
The diversification benefits REITs offer cannot be overstated, said Godur.
With a REIT, you might purchase shares instead.
Some brokers even offer partial shares to those who cant afford the full thing.
For one, the value of your investment is based heavily on thereal estate market.
If interest rates rise and demand drops, your investment could also lose value.
Youre also more likely to see long-term value with REITs, making them better for long-term investors.
Still, theaccessibility and abilityto diversify could be worth these risks and limitations.
REITs Are Highly Liquid
With traditional real estate, liquidity is hard to come by.
It could take weeks or months to sell property and get those cash returns.
But with a real estate investment trust, you might buy and sell shares online through your brokerage account.
REITs are a particularly good investment for investors seeking cash yield, said Johnson.
Many REITs will pay out all earnings, however.
Investing in REITs this year gives the impression of a promising strategy, said Godur.
Its a move that aligns well with thecurrent market dynamicsand could yield significant returns for savvy investors.
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