Best REITs to Invest in Real Estate Without the Hassle

You’ve seen headline after headline that owning real estate is a key piece to building wealth. Well, what if you move around a lot, aren’t interested in dealing with tenants, or don’t have enough money for a down payment? You can still diversify your portfolio and build wealth by investing in one of these best REITs. 

Basics of a REIT?

According to Investopedia, a REIT is a corporation that owns, operates, or finances income-generating real estate. A publicly traded REIT’s stock is traded on stock exchanges. Therefore, investors can invest in the commercial real estate market, which is not something that most retail investors can do on their own. 

To qualify as a REIT, it must own real estate that generates income to distribute to shareholders. Specifically, a REIT must

- Invest at least 75% of total assets in real estate, cash, or US Treasuries - Derive at least 75% of gross income from rents, interest on mortgages that finance a real property, or real estate sales - Pay a minimum of 90% of taxable income in the form of shareholder dividends each year

Tax Rate for REITs

Investors should be aware that there are tax implications for owning REITs. The dividend tax rates for REITs are the same as the regular income tax rate.

3 Best REITs to Buy

1. Realty Income Corporation

 The trust owns more than 6,500 properties with commercial tenants. In addition, Realty Income owns retail properties that are not part of a mall but are standalone properties. 

3 Best REITs to Buy

2. SL Green Realty Corp

In Manhattan, SL Green has ownership interest in 27.1 million square feet of commercial properties. The REIT was founded in 1980.

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