Income-producing commercial real estate is one of the best asset classes an investor can own. Commercial real estate can provide a high and growing income stream, an exceptional potential for capital gains and possible tax advantages. Unfortunately, most individual investors can’t afford to buy commercial property like apartment buildings, warehouses, self-storage facilities and shopping malls. Direct ownership of industrial or commercial property is simply out of reach for most people.
A REIT is a specialized company that invests its capital in income-generating real estate or interest-bearing real estate derivatives such as commercial mortgages. REITs that own and manage properties directly are called equity REITs. REITs that hold mortgages and other financial instruments are called mortgage REITs, or mREITs.
Since their introduction, REITs have become tremendously popular. Today, there are more than 200 publicly traded REITs on the market, representing hundreds of billions of dollars in market capitalization. With all those choices, the REIT landscape can be confusing for investors looking for dividend income and long-term capital appreciation.
In response, Wall Street asset management firms have created a large selection of REIT-focused exchange traded funds, or ETFs, for retail and institutional investors to choose from. REIT ETFs offer professional management and wide-ranging diversification in convenient securities that trade on major stock exchanges.
Here’s a list of…
