With interest rates low and inflation weighing on a variety of asset classes, it’s not surprising that some investors are considering exposure to the real estate sector.

New investors and novices have likely heard about the above-average dividend yields available with real estate investment trusts (REITs), but although the sector is small by weight in the S&P 500, it’s expansive, and knowing where to start can be tricky for newbies.

The ALPS REIT Dividend Dogs ETF (NYSEArca: RDOG) helps investors navigate the wide REIT landscape and does so with an impressive income kicker. RDOG, which tracks the S-Network REIT Dividend Dogs Index, yields 4.14%, or nearly 200 basis points above the yield on the MSCI US Investable Market Real Estate 25/50 Index. Plus, RDOG makes exposure to REITs efficient.

“You can buy shares of the REIT in order to get exposure to its real estate investments and have that real estate be part of your investment portfolio without actually managing property yourself. In fact, according to research from Nareit, a resource platform for real estate companies, 145 million Americans are invested in REIT stocks, as of Oct. 2020,” reports Jasmin Suknanan for CNBC.

Sachin Jhangiani, the co-founder and chief marketing officer at Elevate Money, notes that there are differences between publicly traded, private, and mortgage REITs (mREITs). RDOG’s lineup is comprised of publicly traded REITs.

Investors should also be aware of REITs’ above-average dividend yields and the importance of funds from operations (FFO) as a tool for evaluating a REIT’s ability to sustain and grow payouts.

“REITs invest in assets that generate income, like commercial properties. That income is then distributed to investors on a monthly basis as dividends. By law, REITs are required to pass down 90% of its income to shareholders in the form of dividends,” Jhangiani tells CNBC.

Another part of the equation that new investors might not be aware of is the sheer variety of REITs and how there isn’t uniformity in the performance of those groups. Even professional investors have difficulty pinpointing when residential REITs will be in favor over, say, retail REITs.

For its part, RDOG has a diverse lineup with exposure to 10 industry groups, and none of its holdings exceed a weight of 2.73%.

Other REIT ETFs include the Schwab US REIT ETF (NYSEArca: SCHH) and the Pacer Benchmark Data & Infrastructure Real Estate SCTR ETF (SRVR).

For more news, information, and strategy, visit the ETF Building Blocks Channel.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.