REITs Long-Term Trend

The following chart illustrates the long-term trend of the NAREIT Equity Total Return Index since 1971 (its inception).

The chart illustrates that REITs (real estate investment trusts) have rallied since the depths of the financial crisis back in early 2009.

That rally slowed over time.

More recently, however, REITs rallied following the rollout of COVID vaccines and have held up relatively well during the pick up in inflation.

Also, many REITs currently have substantial dividend yields.

NAREIT Equity Total Return Index Long-Term Trend

What is a REIT?

REITs (real estate investment trusts) are companies that own and/or finance income-producing real estate.

How do REITs make money?

In short, REITs buy real estate which they then rent or lease. REITs are then obligated to pay their shareholders a minimum of 90% of their taxable income in the form of dividends.

What types of REITs are there?

Most REITs would be classified as equity REITs which are publicly traded and own or operate income-producing real estate. The remaining categories of REITs are mortgage REITs, public non-listed REITs, and private REITs.

How can I invest in REITs?

Investors can purchase shares of a REIT directly via their stock broker just like any stock. In addition, there are REIT ETFs and mutual funds.