Income and long-term growth: REITs typically provide both attractive dividend income and the potential to realize long-term capital appreciation.
Access and affordability: REITs allow everyday investors to invest in income-producing real estate by purchasing shares in a REIT rather than making the large capital investments typically required to purchase real estate. Investors can determine the level of their investment by adjusting the number of shares they purchase and hold.
Corporate governance and disclosure obligations: REITs that have securities registered with the SEC and that are listed on a major securities exchange such as the NYSE are subject to SEC and NYSE rules and regular disclosure obligations. These obligations include quarterly and yearly financial reporting that provide a valuable source of information for investors.
Liquidity: shares of publicly traded REITs are readily convertible to cash because they are traded on public exchanges similar to the stocks of other listed companies.
Operational oversight: Independent directors, independent financial analysts, independent auditors and the business and financial media monitor a publicly-traded REIT’s financial reporting on a regular basis. This scrutiny provides investors with a measure of protection and more than one barometer of the REIT’s financial condition.
Portfolio diversification: real estate can provide added diversification to an existing investment portfolio. Moreover, an investment in a REIT can represent an investment that is diversified across a range of real estate properties in a variety of geographic locations.