REITs: Real Estate Investment Trusts Explained

How REITs Actually Make Money

Equity REITs earn rent from tenants across sectors like apartments, warehouses, or medical offices. Long leases, occupancy rates, and escalators shape predictability. Ask us about triple-net leases or build-to-suit agreements you see in earnings reports.

How REITs Actually Make Money

Funds From Operations (FFO) adjusts net income for real estate depreciation, while Adjusted FFO accounts for recurring capital needs. These metrics help judge dividend coverage. Save this breakdown and message which metric you prefer for screening REITs.

Types and Sectors of REITs

Equity, mortgage, and hybrid

Equity REITs own properties. Mortgage REITs provide financing and earn interest spreads. Hybrids blend both. Each reacts differently to rates, credit conditions, and growth. Comment which type fits your risk tolerance and income expectations today.

Specialized sectors shaping the economy

From data centers and cell towers enabling cloud and 5G, to logistics warehouses, self-storage, healthcare, and apartments—sectors respond to unique drivers. Follow for sector spotlights and tell us which niche you want unpacked next.

Publicly traded vs. non-traded options

Public REITs offer liquidity and price transparency, while private or non-traded REITs may feature limited liquidity and fees. Always examine disclosures carefully. Ask for our due diligence prompts before considering non-traded or interval structures.

Risks, Rates, and Realities

Higher rates can pressure valuations and financing costs, but rent growth and sector fundamentals can offset. Time horizon matters. Comment if you want an explainer on duration, debt hedging, and sensitivity to forward curves.

Risks, Rates, and Realities

Analyze tenant concentration, creditworthiness, and weighted average lease term. Same-store NOI trends reveal health. Ask for our checklist to evaluate renewal probabilities and embedded rent escalations in long-term contracts.

Risks, Rates, and Realities

Zoning changes, property taxes, and climate exposure can alter cash flows. Review insurance coverage and resilience investments. Follow for our map-based approach to geographic risk assessment and share the regions you’re researching.

Building Your REIT Strategy

Core-satellite diversification

Use a diversified core—like a broad REIT ETF—then add satellites in sectors you understand deeply. Rebalance on a set schedule. Tell us your current allocation and we’ll suggest a sample framework to consider.

ETFs versus individual REITs

ETFs offer instant diversification and simplicity; single names allow targeted bets and potential alpha. Costs, taxes, and time matter. Subscribe for a comparison checklist to choose the approach that matches your bandwidth.

A personal story: Maya’s first dividend

Maya bought her first REIT after months of learning. When the dividend hit, it covered a utility bill—small, but empowering. Share your first-income story, and join our newsletter to celebrate milestones with others.