REITS

Question 1

What are REITS?

Answer 1

Real Estate Investment Trust that holds real estate

Question 2

What is the benefit of a REIT?

Answer 2

The public markets for equity REITs provide investors with the most efficient (that is, low-cost) way to achieve broad diversification across both geography and property type (for example, offices, warehouses, industrial buildings, multifamily residences, or hotels)

Question 3

Why are REITS advantageous over owning land and becoming a landlord?

Answer 3

Better liquidity as REITS are easier to convert to cash when needed.

Question 5

Which type of asset classes does REIT act as an effective diversifier?

Answer 5

REITS have low correlation to US equities, and thus does a great job dampening the voltatility of a U.S. equity profile.

Question 6

Are REITS tax efficient?

Answer 6

“REITs are not tax-efficient investment vehicles because most of the income they provide is considered either ordinary income or nonqualified dividends.”

Question 7

Since REITs are taxed, what types of portfolios should the be placed in?

Answer 7

Tax advantaged accounts like 401k