The portfolio offers diversification among different types of properties as well as regional diversification. This type of diversification helps to reduce some of the fluctuations in the real estate market as a result of economic downturns or changes in supply and demand in a specific region or type of property. REITs allow investors to participate in a growing real estate industry. REITs offer investors several advantages over ownership of individual properties. REITs are currently required to annually distribute a majority of their income as dividends to shareholders, making them a great source of steady income without forcing investors to manage the properties themselves.
Investors can enjoy the benefits of capital appreciation if properties are sold at a profit.
Another advantage is liquidity. Compared to traditional privately held real estate, which may be difficult to sell, REITs are traded on major stock exchanges making them highly liquid. REIT investors also gain the advantage of skilled management since REIT management teams tend to be experts within their specific property or geographic niches. There is no assurance that the projections stated herein will be realized. This act will enable REITs to grow non-rental income through various initiatives such as offering their tenants telephone or energy services.