According to cnnmoney, investors have bought REITs during the recovery from the recession because they trade like stocks, which is much easier and less risky than buying a building. When mortgages went bad, real estates prices plummeted, and with low interest rates, property became a good investment. As the economy recovered, real estate bounced back and REITs were in the winning corner, and have returned four to six percent annually in dividends, higher than the yield on bonds, which has been two to four percent.
Globally since 2009, REITs have increased in value nearly 140 percent. If the Federal Reserve raises the interest rate later this year, as many expect, bonds will retrun to be the better investment for steady dividends, which will take some of the shine off REITs, but not all: Wells Fargo issued a report this week saying, “Fundamentals for REITs and the underlying commercial real estate market are quite strong.”
In addition, if the housing market continues to strengthen, growth potential in residential REITs will improve. As MHProNews knows, a number of manufactured housing stocks are REITS, and they have been performing rather well. ##
(Image credit: housingwire)
