REITs are tax-advantaged companies that specialize in the ownership of income-producing real estate investments. They generally own diversified portfolios of 100s of properties, use only moderate leverage, and earn rents through long-term lease agreements that protect them during recessions.
It's a defensive business model that has historically:
- Paid higher and more consistent dividends to shareholders.
- Generated double-digit annual total returns.
- And enjoyed 2x better downside protection during recessions.
Not surprisingly, they are very popular vehicles among individual investors. The higher income helps you to remain patient and it often acts a shock absorber against