Are you looking for a way to supplement your monthly income without getting a side gig or working overtime? If so, real estate investment trusts (REITs) may be the answer you've been searching for. REITs are companies that own, operate, or finance income-producing real estate across a range of property sectors. By investing in REITs, individuals can gain exposure to the real estate market without having to deal with the day-to-day responsibilities of property management.
Many investors have REITs in their portfolios because they provide exposure to the real estate market without having to invest directly in physical properties. REITs offer diversification, liquidity, and the potential for attractive returns through dividends and capital appreciation. Additionally, REITs are required by law to distribute at least 90% of their taxable income to shareholders in the form of dividends, making them an attractive option for income-seeking investors.
Homeowners and others looking to gain real estate exposure aren't getting the diversification they expect, research shows. Many investors mistakenly believe that owning a home or investing in real estate directly provides sufficient diversification. However, investing in REITs can offer exposure to a broader range of property types and geographic regions, reducing overall risk in a portfolio.
Sen. Elizabeth Warren (D-Mass.) wants the IRS to amplify its enforcement on real estate investment trusts that are skirting tax laws. Warren has raised concerns about certain REITs taking advantage of tax loopholes and not paying their fair share. Increased scrutiny on tax compliance could impact the performance of some REITs and lead to changes in the regulatory environment for the industry.
NNN REIT is a real estate investment trust with a diversified portfolio and high occupancy rates across 49 states. NNN REIT focuses on single-tenant properties leased to national and regional tenants, providing stable cash flows and long-term growth potential. With a strong track record of performance and a commitment to conservative underwriting standards, NNN REIT is a popular choice among income-oriented investors.
August was an excellent month for most real estate investment trusts (REITs), with about 70% of them profitable. The benchmark Vanguard Real Estate ETF (AMEX:VNQ) gained over 5% during the month, outperforming the broader market. REITs benefited from the continued strength in the real estate market and the Federal Reserve's commitment to keeping interest rates low, supporting property values and rental income.
Stephen Wright thinks shares in a REIT with strong occupancy levels, reliable tenants, and scope to raise rents are a great passive income opportunity. Wright believes that investing in high-quality REITs with stable cash flows and growth potential can provide a reliable source of income over the long term. By focusing on REITs with well-located properties, diversified portfolios, and experienced management teams, investors can build a resilient income stream without the hassles of property ownership.
