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Boberts introduction to REITS

|Includes: DRE, HST, Annaly Capital Management, Inc. (NLY), PCL

I’ll try to keep this plain and simple that even a 5th grader could understand. REIT stands for real estate investment trust. It’s a corporation that allows several different people to put money together to buy real estate property, equities, and mortgages, and distributes 90% of it’s income to avoid paying corporate income taxes.

Why REITS are Great Investments
The tax benefit from less money being taxed can be substantial. Instead of paying a 35% corporate income tax, the income is spread out to each shareholder and taxed at his or her personal rate. So if the average shareholder has a personal income tax rate of 22%, that’s 13% less going to Uncle Sam.

REITS also provide an investor a good source of income while appreciating in value. Because a REIT has to distribute 90% of its income to shareholders, a REIT investor receives quarterly dividends. On top of that, the value of the REIT typically goes up as assets become more valuable. Publicly traded REITS have consistently outperformed the S&P 500 and continue to do so

Different types of REITS
Diversified – Top 5: NLY, PCL, DRE, RYN, MFA

Healthcare Facilities – Top 5: HCP, VTR, HCN, NHP, OHI

Hotel/Motel – Top 5: HST, LHO, DRH, SHO, AHT

Industrial – Top 5: PSA, PLD, DLR, AMB, ARE

Office – Top 5: BXP, DRY, PDM, CLI, OFC

Residential – Top 5: EQR, AVB, UDR, ESS, CPT

Retail – Top 5: SPG, KIM, MAC, FRT, SLG

Property Management – Top 5: VNO, BPO, CBG, IEP, CIM

Stay tuned ’til my next blog about REITS