Top 5 Reasons to Invest in REITs (Real Estate Investment Trusts) Today

by | Aug 9, 2023 | Vanguard IRA | 39 comments




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5 Reasons to BUY NOW | REITs (Real Estate Investment Trusts): We’ve been investing in REITs (Real Estate Investment Trusts) and we think you should consider investing in them too! We’ve have incredible returns with our REITs over the past several years. In this video, we discuss what REITs are, what they invest in, the different types of REITs, our recommended REITs, and the top five reasons why we think REITs are good investments to add to your stock market portfolio. Thanks for watching!

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Are you considering investing in the real estate market? If so, now may be the perfect time to dive into the world of Real Estate Investment Trusts (REITs). These investment vehicles offer numerous advantages for individuals looking to gain exposure to the real estate sector without the hassles of property ownership. Here are five compelling reasons why you should consider buying REITs now:

1. Steady Income Generation: REITs are renowned for their ability to generate a stable income stream. As mandated by law, they are required to distribute at least 90% of their taxable income to shareholders in the form of dividends. This means that by investing in REITs, you can enjoy a regular cash flow, often with a higher dividend yield than other investments. This income can be an additional source of reliable income or a great means of diversifying your investment portfolio.

2. Diversification Benefits: Real estate has historically displayed a low correlation with the stock market, making it an effective diversification tool. By including REITs in your investment portfolio, you can further reduce the risk associated with a concentrated equity portfolio. This diversification benefit can help cushion your investment from the volatility and fluctuations often seen in equity markets.

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3. Access to Multiple Real Estate Sectors: Investing in individual properties often entails a significant amount of capital and expertise in a specific real estate sector. However, REITs offer a more accessible entry point for retail investors to diversify across various real estate sectors such as commercial, residential, healthcare, and industrial properties. By investing in REITs, you gain exposure to multiple sectors simultaneously, expanding your investment horizon and lowering your risk.

4. Professional Management: One of the key advantages of investing in REITs is the professional management team behind these entities. REITs are managed by experienced real estate professionals who navigate through market cycles, identify lucrative opportunities, and manage properties efficiently. By investing in REITs, you leverage the expertise of professionals who handle assets on your behalf, saving you time and effort.

5. Liquidity and Accessibility: Unlike physical real estate investments, REITs offer attractive liquidity and accessibility. They are traded on major stock exchanges, allowing investors to buy and sell units easily. This means that you can enter or exit your investment in REITs at any time, making it a flexible investment option for those seeking quick access to their funds.

While these reasons highlight the advantages of investing in REITs, it is important to conduct thorough research and consult with a financial advisor before making any investment decisions. Although REITs have demonstrated their potential to yield attractive returns, market risk and individual performance can vary. Therefore, it is essential to evaluate the current economic climate and the performance of specific REITs before diving into this investment.

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39 Comments

  1. Reinhard Rodriguez

    hi Aman and Christina! Hope all is well! What is the best Real estate index fund for non-US citizens?

  2. gabe aceves

    What percentage of my portfolio should be in a reit index fund ? I’m thinking 10-15 percent ? The others will be the vtsax 50%, international 25% and the total bond 10%

  3. Jussi Askola - REIT Investing

    I would add that most REITs should do just fine in a recession. Today, REIT balance sheets are the strongest they have ever been and the high inflation has led to rapid rent growth. Most REITs also earn steady rental income through recessions because they have long-term leases. But it of course depends from one REIT to another. I just recently discussed this topic also on my channel. Thank you for the great video!

  4. Pujdak

    thanks so much besides VGSLX & VNQ and others ??

  5. Nikhil Das Nomula

    Do you have REITS in your IRA accounts or brokerage accounts?

  6. Flipping For FUNds

    I’m curious if these REITs are still part of your portfolio in 2022

  7. Jason Feliciano

    Like a S&P500 REITs will monitor the whole real estate market?

  8. Klever Froilan

    hi, you both make really good videos…can you folks make an update for today's makert

  9. Mizrahim Jew

    First time seeing your video. You guys are awesome and will be learning from you guys and investing more so I can become financially independent. Thumbs up!

  10. DIRGES in the DARK

    So REITS are turning the country into renters?

  11. Aika

    After watching you channel I decided to start investing too. I think s&p500 is a good start. But I will be investing with companies which are approved by Sharia( no alcohol companies, no interest). It's seems there is only ETF but not the regular s&p 500 index funds. The question is can go with etf but do not sell them just keep for years as a regular index fund and get dividends?

  12. Laflor

    Hey guys! What do you think about investing in these now two years later?

  13. Andrew

    High dividends sound appealing at first, but they are taxed at ordinary income tax rates (unless they're qualified dividends). I think they make most sense in a tax-advantaged account.

  14. Soheyla Noghrehkar

    Can I buy Vanguard Reits in Fidelity account?

  15. Random Smart Stuff

    I thought rent is 12% if you're renting at 1%?

    And no most REITs under perform the S&P 500

  16. Soheyla Noghrehkar

    Can I own VNQ or VGSLX in Fidelity account with no charge?

  17. Still Iraise

    Just found this video after two yrs. Every one explains how awesome is to invest in REITS but I think everyone that knows about don't know that people don't know where to go. So I had to type where to go to invest in REITS. And you video just pop.

  18. Soheyla Noghrehkar

    What about if I have account with Fidelity.

  19. 1ofnoother

    I thought VNQ hasn't outperformed the S&P 500 except for one year?

  20. Christer Sandnes

    The benefit of real vs reits, is leverage.

  21. Taghazout Moon

    Do you still own houses in America? Do you regret selling if you missed out on the boom?

  22. Hemang Chawla

    Aren't REITs already part of total market index fund? When investing separately in REITs then it is about weighting more towards REITs, right?

  23. Ditronus

    Vglx is averaging about a 10% return, dividend included, in the last 5 years right? I dont see that beating out traditional real estate from a return point of view. I'm interested but need to look into it more. I'm asking myself why a reit over some other large cap stocks that pay out dividends? I suppose diversification into real estate is one.

  24. Chayah Israel

    Can you do a video on reits again and why it’s better to invest using a Roth IRA?

  25. Avinash M

    Where we should we keep Reits? Whether in taxable brokerage account or in tax advantage accounts such as hsa, 401k, roth ira??

  26. Mansa Kali

    Thanks for sharing this video. I just started looking inti REITS on my own and your video explains and brings everything together.

  27. Chris

    Thanks for the info! What percent of your portfolio would you recommend REITs to be?

  28. Elyse B

    Obrigada! Thank you, always and forever, for your excellent commentary. I bought some VGSLX seven years ago, with the proceeds of my home sale. The entire portfolio doubled in that time (just like they say it should). 🙂 Every month I allot a certain amount of money over into NFCU. I plunked that into more VGSLX moments ago. I PCS to CA next year. I don't feel comfortable using my VA loan to buy a property and then have to worry about selling or renting when I PCS again. THIS is my kind of real estate investing. You're amazing, down-to-earth role models. May God bless you and yours!

  29. Primeiros Passos Para Investir

    Really nice stuff. Soon I will start investing in REITs too….but there in US. Now, I have to study it all. Ur channel is the bomb! Cheers

  30. Lyndon Murray

    Would I have to set up a tax-advantaged account like an IRA, before I open a REIT account?

  31. Lyndon Murray

    I would like to open a REIT account through Vanguard. Compared to TD Ameritrade, Charles Schwab, and Fidelity, Is Vanguard the best option? Where do I go to sign up for a REIT account on Vanguard if I choose them? Thanks, your channel is very informative.

  32. Rajwinder Makkar

    Very helpful , thanks for putting it together .. one thing on rental vs reits .. if we own rental then we do enjoy real estate price appreciation which will not be in reits ?

  33. Ari Gutman

    REITs on REITs on REITS! They are easily one of the best investments for passive dividend income given their relatively high(er) yields and reliability! I personally have 3 go-to reits from Realty Income for obvious reasons, especially with their recent acquisition with VEREIT, then STAG Industrial which is Amazon's landlord and last, but not least Store Capital which is Buffett's favorite. Just today, I threw up another two outstanding REITs poised to grow both in terms of value and their dividends… ALL IN ON EM! Great video and thank you for sharing!

  34. Kashara Spivey

    Thank You So Much! Didn't know that reits payed dividends. Nice

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