Investors find that REIT stocks and ETFs provide stability and income to offset the doldrums of low interest rates. Furthermore, some companies are seeing opportunity in the demand for income-oriented investments and are trying to go through the process to qualify as REIT status. Their tax-efficient corporate structure allows them to reap some big benefits over regular companies, but that favorable tax status comes with some restrictions, reports Dan Caplinger for The Motley Fool.
From a shareholder point-of-view, the rewards of owning a REIT are based on the profits that a company has retained rather than paying out in dividends throughout the time of inception, giving the potential for dividend status.
Given that investors have tended to bid up shares of companies announcing special dividends, getting in before a firm announcement could give you the chance at beating the rush and enjoying some additional share-price appreciation to go with a nice chunk of cash, explains Caplinger.
Vanguard REIT ETF
Tisha Guerrero contributed to this article.