All the right factors are fueling property demand. For instance, the housing market is recovering as home sales, housing starts and pricing are steadily on the rise. The jobs market is expanding, with more gains in 2014 than any year this century. More Americans are earning, cutting down debt and spending more. Additionally, the credit markets are in good standing, with rates and inflation both low. [Commercial REIT ETFs in a Good Spot]
VNQ also holds allure for investors looking for new positions in a tax-deferred account.
“One major attraction is there are virtually no income taxes. It isn’t taxed at the corporate level or the personal level. That’s wonderful. Yes, the total investment will be taxed when it is withdrawn in retirement, but assuming the investor’s tax rate remains the same, the net impact is zero,” according to Seeking Alpha.
REITs provide a liquid alternative to owning physical commercial real estate properties. REITs investments also share similar attributes with stocks and bonds. Since REITs are required to distribute at least 90% of their income from rent payments to investors, these real estate investments can generate attractive yields.
Vanguard REIT ETF
