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Financial Advantages of Investing in REITs
One of the most compelling reasons to invest in REITs is the potential for high dividend yields. Historically, REITs have provided higher yields compared to other equities, making them an attractive source of income for retirees or anyone looking to supplement their earnings. According to Nareit, the dividend yield for REITs has averaged around 4% over the past decade, which is significantly higher than the average yield of the S&P 5002.
Additionally, REITs offer diversification benefits, as they typically have a low correlation with other asset classes like stocks and bonds. This can help reduce the overall risk in an investment portfolio. Moreover, the liquidity of publicly traded REITs allows investors to buy and sell shares easily, unlike direct real estate investments, which can be time-consuming and costly to liquidate.