REITs Offer Income & Stability

Article Excerpt

High quality Real Estate Investment Trusts, or REITs, are among the most stable of the royalty and investment trusts. That’s because they own non-depleting assets, and can lock in lease rates and financing costs for long terms. REITs we recommend hold top-quality assets. In contrast, many other types of trusts hold low-quality assets in volatile industries such as resources and commodities, sugar production or restaurants. These trusts expose holders to hidden business risks that could have a sudden, devastating effect on their cash flow and yields. The best of the REITs have good management and balance sheets strong enough to weather an economic downturn. They also have high-quality tenants, and carefully match their debt with their leases. They are also taking advantage of low rates to refinance long-term mortgages. In some cases they have room to build or expand on existing properties. We don’t think you should overindulge in REITs. But if you stick with the highest quality, you’ll make steady returns with…