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Why Consider Investing in REITS?

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Real Estate Investment Trusts (REITs) are investment vehicles that own, operate, or finance income-generating real estate properties. REITs allow individual investors to pool their money together to invest in a diversified portfolio of real estate assets, without having to directly own or manage properties themselves. REITs are designed to provide regular income and the potential for long-term capital appreciation. Some of the many benefits of investing in REITs and why many consider investing in REITs are below:

1. Diversification

REITs provide investors with access to a diversified real estate portfolio, spreading risk across various property types and geography. There are a variety of REITs available to investors that invest in anything from mortgages to real property to cell towers or data centers. Some REITs focus on a specific product type (office, industrial, multifamily, student housing, self storage etc.). While other REITS may have a geography focus (Asia, Europe, North America etc.).

2. Income Generation

To qualify as a REIT, the company must meet specific IRS requirements. One of the key benefits of being a REIT is the ability to avoid corporate income taxes at the entity level if the REIT distributes at least 90% of the taxable income to shareholders in the form of dividends. This tax treatment enhances the appeal of REITs as income-focused investments. Investors focused on tax advantaged distributions should consider REITs.

3. Accessible Entry Point for Main Street Investors

REITs in general have a low investment minimum making it easily accessible to the every day investor. Additionally, REITs provide access to institutional real estate portfolios that may not have previously been accessible to Main Street investors.

4. Tax Advantages

The Tax Cuts and Jobs Act of 2017 introduced a 20% tax rate reduction on REIT ordinary distributions. This rate reduction expires in 2026. Additionally, another key tax advantage of REITs is the Return of Capital (ROC) tax shelter, which may reduce the taxable portion of distributions.

Not an offer to buy, nor a solicitation to sell securities. Private Placements are speculative all investing involves risk of loss of some or all principal invested. Past performance is not indicative of future results. Speak to your finance and/or tax professional prior to investing. Any information provided is for informational purposes only.

Securities Offered By WealthForge Securities LLC. Member FINRA/SIPC.

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