Best REITs Paying Monthly Dividends

A REIT (Real Estate Investment Trust) is a special company that pools together the capital of investors to purchase, operate, or finance real estate that generates income. A REIT provides several advantages for an investor.

  • Firstly, a REIT is a great way for investors to earn a dividend from investing in real estate without having to buy, finance, or manage a property themselves.
  • Secondly, a REIT gives an investor diversification as a REIT portfolio can include many types of properties ranging from apartment complexes, hotels, and data centers, through to office buildings, warehouses, and even cell towers and energy pipelines.
  • Thirdly, unlike a physical real estate investment, REITs are highly liquid as they are publicly traded like stocks on major security exchanges.

The disadvantage for investors is that REITs don’t offer much in the way of capital appreciation, so they’re used primarily for dividends only. Due to regulations, for a REIT to maintain its tax-free status it is required to distribute more than 90% of its earnings each year. This means that for investors, they can buy a REIT and enjoy high dividend payments with a consistent dividend policy.

Being exchange-traded, there are times when prices can get out of line with fundamentals, thus presenting buying opportunities. Savvy investors who have stuck with REITs through the various market gyrations over the years have enjoyed an average 13% annual return, as measured by the MSCI U.S. REIT Index.

The Best Monthly Paying REITs

Most REITs distribute dividends every quarter. However, a few distribute monthly as well. This can be an advantage for investors, as more frequent payouts means more opportunity to reinvest and start compounding earlier. Here are some of the best REITs that distribute dividends monthly.

American Capital Agency Corporation (AGNC)

AGNC is managed by American Capital Ltd. and primarily invests in mortgage-backed securities and collateralized mortgage obligations that are guaranteed by a government-sponsored agency.

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Disclaimer: The information above is for educational purposes only and should not be treated as investment advice. The strategy presented would not be suitable for investors who are ...

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