REITs at risk? 5 risks real estate investment trusts are facing
REITs are undoubtedly one of the most popular instruments for dividend investors. However, especially in these times, they can also bring great dangers and several specific risks to watch out for. In particular, REITs focusing on commercial and office space are at risk.
REITs (Real Estate Investment Trusts) are companies that invest in real estate and provide investors with the opportunity to invest in the real estate market without the need for separate ownership of the property. REITs offer investors a number of benefits such as stable returns, portfolio diversification and easy liquidity. However, investing in REITs also carries risks. And especially in these times of talk of a commercial real estate crisis.
REITs must pay out a large portion of their profits in the form of dividends because those are the rules for their tax status. Specifically, in order to maintain their REIT status and thus receive tax benefits, they must meet several conditions.
- Pay out at least 90% of their…
Great article, I do think that with $MPW for example, the demand for medical facilities and surgeries will grow. We'll see how the repayment thing goes, but I believe they'll pull through.
I'm hoping they might drop a bit now and you could buy more :) In the long run, I think it's a great sector :)
I would like to invest in a REIT. Even if there were some downturns I would use that to buy and then plan to hold long term.
Nice description of the industry. I have both companies in the portfolio you list here plus $WPC Perhaps as you state in the comments, this is just a temporary non-transition period.
I'm not worried about a lot of long term REITs having problems