Learn REITs

What Is a REIT? A REIT is a company that owns, operates, or finances income-producing real estate and must follow IRS rules to keep that status 6 min read How REITs Work: Turning Real Estate Into Dividends REITs raise capital, buy or finance real estate, collect rent or interest, and pass most of that income back to shareholders as dividends 6 min read The History of REITs (1960–Today) Congress created REITs in 1960 to open large-scale commercial real estate to ordinary investors, and the industry grew from there 6 min read The 90% Distribution Rule Every REIT must distribute at least 90% of its taxable income to shareholders each year, which is why REIT dividends run high 5 min read REIT Qualification Rules (Asset & Income Tests) REITs must pass annual IRS tests covering how they are organized, where income comes from, what assets they hold, and payouts 7 min read Equity REITs vs. Mortgage REITs Equity REITs own real estate and collect rent, while mortgage REITs finance real estate and earn income from interest spreads 6 min read Traded vs. Non-Traded vs. Private REITs REITs can be publicly traded on an exchange, publicly non-traded, or private, and liquidity differs enormously across the three 6 min read How REITs Make Money Equity REITs earn money mainly from rent under leases, while mortgage REITs earn interest income from real estate loans instead 6 min read What Is an UPREIT (and DownREIT)? An UPREIT holds property through an operating partnership, letting owners contribute real estate for units instead of cash 5 min read Internally vs. Externally Managed REITs REITs are run either by an in-house team or by an outside management company paid a fee, which can shape incentives differently 5 min read Are REITs Right for You? Whether REITs fit an individual's goals depends on income needs, risk tolerance, time horizon, and tax situation, among other factors 6 min read

How to Buy REITs A practical walkthrough of how investors buy REITs, from public shares and ETFs to non-traded and private offerings 6 min read How to Analyze a REIT (Beginner's Framework) A beginner-friendly framework for evaluating a REIT, covering sector, FFO and AFFO, leverage, portfolio quality, and valuation 8 min read Understanding REIT Dividends How REIT dividends work, why they tend to be large, and how their tax treatment differs from typical stock dividends 6 min read Dividend Yield: How to Read It What dividend yield actually measures, why REIT yields tend to run higher, and why a high yield is not automatically good news 6 min read Dividend Safety: Is the Payout Sustainable? A framework for judging whether a REIT dividend is comfortably covered, using payout ratios, cash flow trends, and the balance sheet 7 min read REIT ETFs vs. Individual REITs How buying a REIT ETF compares with buying individual REIT shares, including diversification, cost, and control tradeoffs 6 min read Building a REIT Income Portfolio How investors approach building a diversified REIT portfolio focused on generating dividend income across property sectors 7 min read Reinvesting Dividends (DRIPs) How dividend reinvestment plans automatically convert REIT cash dividends into more shares, and why investors choose to use them 6 min read Interest Rates and REITs Why REITs are often considered interest-rate sensitive, the channels involved, and why the historical relationship is not simple 7 min read REITs in a Recession How economic downturns can affect REIT occupancy, dividends, and share prices, and why property sectors respond very differently 7 min read Common REIT Investing Mistakes Common missteps investors make with REITs, from chasing yield to ignoring leverage and misreading standard net income figures 7 min read REITs for Retirement Income How REITs are commonly used as part of a retirement income mix, and what retirees typically weigh before relying on that income 7 min read

FFO (Funds From Operations) Explained FFO adds back real estate depreciation and removes property-sale gains from net income, the REIT sector's core earnings number 6 min read AFFO (Adjusted FFO) Explained AFFO takes FFO further by subtracting recurring capital spending and adjusting for straight-line rent to estimate distributable cash 6 min read FFO vs. Net Income Why GAAP net income and FFO diverge for REITs, and why real estate depreciation is the reason the two numbers tell different stories 5 min read Price-to-FFO (the REIT P/E) Price-to-FFO swaps FFO for net income in the familiar P/E formula, fixing the distortion real estate depreciation causes REITs 6 min read REIT Payout Ratios How to calculate a REIT's FFO and AFFO payout ratios, and why REIT payout ratios run higher than the broader stock market 6 min read Net Asset Value (NAV) Explained Net Asset Value estimates what a REIT's real estate is worth today using cap rates, and how that differs from GAAP book value 6 min read Premium & Discount to NAV Comparing a REIT's stock price to its estimated Net Asset Value per share to see whether shares trade above or below that value 6 min read Net Debt / EBITDA & REIT Leverage Net Debt / EBITDA measures how many years of cash earnings it would take a REIT to repay its debt, the sector's core leverage gauge 6 min read Reading a REIT Balance Sheet How to read a REIT's balance sheet, real estate at depreciated cost, secured and unsecured debt, and preferred stock and OP units 7 min read Same-Store NOI Same-store NOI isolates organic property performance from acquisitions, giving the cleanest read on a REIT's existing portfolio 6 min read Occupancy, Leasing Spreads & WALT Occupancy, leasing spreads and WALT explained together, the leasing statistics that drive every REIT's same-store NOI growth story 7 min read Cap Rates Explained Cap rate equals net operating income divided by property value, the core formula behind how commercial real estate gets priced 6 min read Implied Cap Rate Implied cap rate reverse-engineers a cap rate from a REIT's stock price, using enterprise value in place of a private sale price 6 min read How to Read a REIT Earnings Supplement How to read a REIT's quarterly earnings supplement, the FFO reconciliation, same-store NOI, leasing stats and debt schedule inside 7 min read

REIT Sectors Overview A guided tour of the major REIT property sectors, what each one owns, and why sector shapes risk as much as size or yield does 4 min read Residential REITs How apartment, single-family rental, and manufactured-housing REITs earn rent from households and what drives their occupancy 4 min read Retail REITs How mall, shopping-center, and strip-center REITs earn rent from retailers and why grocery-anchored centers held up well 4 min read Office REITs How office REITs lease space to corporate tenants and why hybrid work has reshaped demand for downtown and suburban buildings 4 min read Industrial & Logistics REITs How warehouse and logistics REITs profit from e-commerce and supply chains, and why new supply can catch up with demand fast 4 min read Data Center REITs How data center REITs lease server space and power to cloud and enterprise tenants, and why electricity access limits growth 4 min read Cell Tower / Infrastructure REITs How cell tower REITs lease the same site to multiple wireless carriers, and why mobile data growth has driven decades of demand 4 min read Self-Storage REITs How self-storage REITs rent flexible units tied to moving and downsizing, and why demand differs from the broader economy 4 min read Healthcare REITs How healthcare REITs own senior housing, medical offices, and hospitals, and why an aging population drives long-term demand 4 min read Hotel & Lodging REITs How hotel REITs own real estate run by outside operators under major brands, and why room revenue is the most cyclical type 4 min read Net Lease REITs How net lease REITs collect rent from single tenants who also cover taxes, insurance, and upkeep on long, escalating leases 4 min read Timberland REITs How timberland REITs earn income from harvesting and selling timber, and why housing construction drives demand for logs 4 min read Gaming & Specialty REITs How gaming REITs lease casino real estate to licensed operators, plus how billboard and farmland REITs round out specialty 4 min read

How REIT Dividends Are Taxed Most REIT dividends are taxed as ordinary income, not the lower qualified-dividend rate many other stocks get, so the after-tax picture differs 5 min read The 20% Pass-Through (Section 199A) Deduction A 2017 tax law lets many investors deduct up to 20% of their qualified REIT dividends before tax is applied each year 5 min read Return of Capital Distributions Part of many REIT distributions isn't taxed as income at all — it's classified as a return of your own invested capital 5 min read REITs in IRAs & 401(k)s Because REIT dividends are mostly ordinary income, many investors choose to hold them inside a retirement account 5 min read Reading Your 1099-DIV Form 1099-DIV splits a REIT's distributions into ordinary income, capital gains, and return-of-capital boxes for tax time 5 min read Why REITs Avoid Corporate Tax REITs can skip corporate income tax by law, as long as they pay out at least 90% of taxable income to shareholders each year 4 min read Foreign Investors & REIT Taxes (FIRPTA) FIRPTA is a U.S. law that can tax foreign investors on REIT-related gains that might otherwise escape U.S. tax 4 min read The REIT Structure (Trust, OP, TRS) Behind a single stock ticker, most large REITs use a layered legal structure built around a trust, an OP, and a TRS 4 min read REIT Compliance & Regulation REITs answer to the SEC for disclosure, the IRS for annual tax qualification, and exchange rules if their stock is listed 5 min read

REITs vs. Stocks A side-by-side look at how REITs and broader stocks compare on income, taxation, valuation metrics, and price volatility 5 min read REITs vs. Bonds How bond coupons and maturities compare with REIT dividends and share prices on income, risk, and rate sensitivity 5 min read REITs vs. Rental Property Comparing REIT shares with direct rental property ownership on liquidity, capital required, control, effort, and taxes 6 min read REITs vs. Real-Estate Crowdfunding How exchange-traded REITs compare with real-estate crowdfunding platforms on liquidity, regulation, fees, and access 6 min read REITs vs. Real-Estate Mutual Funds Comparing individual REIT shares with real-estate mutual funds on pricing, management style, diversification, and cost 5 min read REITs vs. Dividend Stocks How mandatory REIT payouts compare with discretionary dividend-stock payouts on yield, taxation, and measurement 5 min read REITs vs. Utilities Comparing REITs and utility stocks, two classic income sectors, on regulation, business model, leverage, and taxes 5 min read Equity vs. Mortgage REITs (Deep Dive) A deeper look at how equity and mortgage REITs differ in financing, leverage, valuation, and dividend behavior 7 min read Traded vs. Non-Traded REITs (Deep Dive) A deeper look at how exchange-traded, non-traded, and private REITs differ in pricing, liquidity, fees, and regulation 7 min read