- Investors in REITs often put vastly too much emphasis on dividend yields.
- When they switch over to FFO multiples, they are still not digging anywhere near deep enough.
- AFFO multiples will put you in a better situation, but it still isn’t enough. To evaluate the REITs, you need to understand leverage.
- Equity REITs with high leverage generally underperform. When you filter down to only considering REITs with a high yield, you get a bad sample size.
- UMH is a great example of a common amateur pick. It has been garbage for years. The right path was SUI & ELS.
For further details see:
Stop Buying Yield