While REITs can be suitable, diversified investments, they still need to be analyzed similarly to other asset classes tradable on the stock market. There is no need to go through a broker platform that charges unnecessary third-party fees. Instead, look for a partner to invest in that evaluates and knows the best REITs to buy.
You should be able to browse available investments offered through a partner that is careful with its selection of properties. Conclusion: there should be details about each investment member to review and explore to help them find opportunities best suited to their investment goals.
Look for a partner qualified by the SEC to offer REIT investment opportunities to any US resident over the age of 18, regardless of whether they are unaccredited or accredited investors. With certain types of real estate investments, such as farmland properties, only accredited investors can take advantage of the opportunities.
There isn’t just one answer to “What are the best REITs to buy?” Instead, many factors come into play, including the organization in charge of the REITs, their strategy, how they pay dividends, the current state of the particular properties, future expectations, location, and so on.
The thing with REITs is that each focuses on a particular niche, similar to how mutual funds focus on a specific industry. For example, some REITs focus more on residential properties such as condo rentals in high-income areas. In contrast, others may concentrate on office buildings in urban areas.
Best REITs to Buy By Property Type
If possible, you might want to stick to a type of building or property you are familiar with, in locations on which you have done much research. But, on the other hand, if you don’t know much about that particular place, don’t just hop on the first opportunity to invest in a REIT in a popular tourist attraction.
Keep in mind that REITs DO carry some debt since they must finance the properties they buy. Also, real estate investment trusts must pay out around 90% of their taxable income as dividends to shareholders. As a result, REITs can’t stockpile much cash. This point is where investors come in. While debt is to be expected, be careful not to invest in any REITs with EXCESSIVE debt.
Anything above a six or below a four in debt to EBITDA ratio is considered risky. Therefore, the best REITs to buy are those with a debt to EBITDA ratio between 4 and 6. You can learn more about this terminology and how other aspects of real estate interest trusts are evaluated through DiversyFund. This platform brings high-value private market assets such as real estate to the average investor looking for a way to start getting into the REIT game.