While REITs are a popular choice for earning income, the FTSE NAREIT index is only yielding 4.7% right now. Compared to its historical range, this is very low, although in the last 20 years, the REIT yield range seems to have shifted. Even relative to more recent history, the current yield is low, so REITs are likely to return much less than they have on average in the past.
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Some may argue that it is more important to measure REIT yields relative to treasuries. Looked at from this perspective, REITs look pretty good right now. The problem with this comparison is that treasuries are yielding so little right now, that even a low yield looks great relative to treasuries.
With the valuations of most asset classes high, REITs are not alone in having low yields. The dividend yield of the S&P 500 is similarly much lower than average. And treasuries have yields very close to their historical low, so right now, REITs are probably a better choice than treasuries.
Overall, REITs look set to return much less than their historical average, but don't look that bad relative to many other asset classes because valuations are high everywhere. So REITs are not an outstanding buy, but are probably not the worst choice.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.