Rising interest rates and the decline of shopping malls have weighed on real estate investment trusts (REITs) over the past few years. The good news is that many REITs – special tax-advantaged businesses provide investors with exposure to real estate – are now trading at bargain prices.
That makes now an opportune time to jump broadly into this traditionally dividend-friendly asset class via mutual and exchange-traded funds.
REITs – which own and often operate real estate such as apartments, office buildings, malls and industrial properties – get certain tax breaks, but in return must pass through 90% of their income to shareholders every year. That makes them good yield plays; currently, the average REIT yields 4%, which is higher than most stock or high-quality bond yields.
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