3 Reasons REITs Can Bolster Your Retirement Portfolio

Melissa Brock

Real estate is a great way to earn constant returns — but maybe you’re not cut out to be a landlord and still want to invest in real estate.

Advertisement.

There are more ways you can do that instead of buying a couple of duplexes or trying to get renters for your own commercial real estate venture. Real Estate Investment Trusts (REITs) can be a great way perk up your investments and recession-proof your finances.

REITs are companies that own or finance income-producing real estate. REITs can help you access a variety of different types of sectors, including retail, residential, health care, mortgage and office buildings. In addition, REITs can help to build retirement investing. Here are three reasons why REITs can help you feel at peace with your retirement investing.

Reason 1: They Can Be Recession-Proof

Let’s start with the caveat that we know a recession won’t happen consistently over for the next 20 years. But right now, you may feel skittish about the economy. There is reason for it — the volatile stock market has given back some gains, the trade war is dragging on and the global economy looks like a weak link if you compare it to about 100 other points in history.

Advertisement.

A REIT can be a saving grace for your portfolio. For example, health care REITs are a great option because clinics, medical offices and assisted living facilities will still be needed, no matter what happens in the economy. A massive percentage of the U.S. GDP is concentrated on health care, so a health care REIT can be a great way to anchor your portfolio.

Exclusive  ETF Talk: A ‘Wise’ Investment in Cryptocurrency

Keep in mind that a potential upcoming recession won’t be the last. If you’re willing to count Wikipedia as a source, it states that there have been about 47 recessions since the fledgling United States created the Articles of Confederation. You might hit another one on your way to retirement, so be sure to keep health care REITs’ longevity in the picture.

Reason 2: They Offer Ample Diversification and Liquidity

REITs are like giant, steady boulders anchored in the side of a mountain because they offer diversification. In fact, if you want an apples-to-apples comparison, you could argue that they’re similar to mutual funds, which offer more diversification than individual stocks. So instead of investing in one commercial building that could take a tumble at any point — you’re automatically diversified with REITs.

What happens if you change your life plan and need your money earlier? For example, maybe you’re 37, plan to join the Financial Independence, Retire Early (FIRE) movement at 40 and need your REIT money in a few years. Unlike traditional real estate, many REITs are traded on stock exchanges. You get instant diversification from actual real estate assets. Liquidity can be an important part of your decision — just in case you need it.

Advertisement.

Reason 3: Long-term Potential

REITs are a great long-term investing option. They can provide high dividend yields and can offer long-term capital. The key is to find REITs that can offer both. For example, look into Welltower Inc. (WELL $90.11), the largest health care REIT on the market. This REIT spans a wide breadth of medical care, including hospitals, clinics, assisted living and skilled nursing facilities. The company owns hundreds of health care facilities — not just in the United States, but Canada and the United Kingdom as well.

Exclusive  ETF Talk: China A-Shares -- You Can’t Always Get What You Want

REITs Can Take Care of You in Retirement

REITs can be part of your retirement planning to go a step beyond online stock trading. The right type of REIT for each person depends on many factors. Here are two of the biggest ones:

  1. Find a REIT that has a strong management team.
  2. Look for REITs that have strong properties and stable tenants.

Do your research — it’s arguably the most important part of investing in an REIT.

Melissa Brock, personal finance expert, is the Money editor at Benzinga. She enjoys international travel and writing about personal finance and entrepreneurship.

Advertisement.
share on:

Like This Article?
Now Get Mark's FREE Special Report:
3 Dividend Plays with Sky-High Returns

This newly-released report by a top-20 living economist details three investments that are your best bets for income and appreciation for the rest of the year and beyond.

Get Access to the Report, 100% FREE


img
share on:

PREMIUM SERVICES FOR INVESTORS

Dr. Mark Skousen

Named one of the "Top 20 Living Economists," Dr. Skousen is a professional economist, investment expert, university professor, and author of more than 25 books.

Product Details

  • Forecasts & Strategies
  • Home Run Trader
  • Fast Money Alert
  • Five Star Trader
  • TNT Trader
LEARN MORE HERE

Bryan Perry

A former Wall Street financial advisor with three decades' experience, Bryan Perry focuses his efforts on high-yield income investing and quick-hitting options plays.

Product Details

  • Cash Machine
  • Premium Income PRO (exclusively for subscribers of Cash Machine)
  • Quick Income Trader
  • Breakout Options Alert
  • Hi-Tech Trader
LEARN MORE HERE

Jim Woods

Jim Woods has over 20 years of experience in the markets from working as a stockbroker,
financial journalist, and money manager. As well as a book author and regular contributor to
numerous investment websites, Jim is the editor of:

Product Details

  • Successful Investing
  • High Velocity Options
  • Intelligence Report
  • Bullseye Stock Trader
  • Eagle Eye Opener
LEARN MORE HERE

Bob Carlson

Bob Carlson provides independent, objective research covering all the financial issues of retirement and retirement planning. In addition, Bob serves as Chairman of the Board of Trustees of the Fairfax County (VA) Employees’ Retirement System, which has over $2.8 billion in assets.

Product Details

  • Retirement Watch
  • Retirement Watch Spotlight Series
  • Lifetime Retirement Protection Program
LEARN MORE HERE

Jon Johnson

Jon Johnson's philosophy in investing and trading is to take what the market gives you regardless if that is to the upside or downside. For the past 21 years, Jon has helped thousands of clients gain success in the financial markets through his newsletters and education services:

Product Details

  • Investment House Daily
  • Stock of the Week
  • Technical Traders Alert
  • Rapid Profits Stock Trader
LEARN MORE HERE

DividendInvestor.com

Used by financial advisors and individual investors all over the world, DividendInvestor.com is the premier provider and one-stop shop for dividend information and research.

Product Details

Popular tools include our proprietary Dividend Calendar, Dividend Calculator, Dividend Score Card, and many more.

  • Dividend Investor
LEARN MORE HERE

George Gilder

George Gilder is the most knowledgeable man in America when it comes to the future of technology and its impact on our lives.  He’s an established investor, bestselling author, and economist with an uncanny ability to foresee how new breakthroughs will play out, years in advance.

Product Details

  • Technology Report
  • Technology Report PRO
  • Moonshots
  • Private Reserve
  • Millionaire Circle
LEARN MORE HERE

DayTradeSPY

DayTradeSPY was founded by head trader Hugh Grossman, a retired internal auditor for a Fortune 500 company. After years of first-hand experience trying out one trading strategy after another, Hugh instead developed his own trading system centered around day trading SPY options. That’s it... Nothing else.

Product Details

  • Trading Room
  • Pick of the Day
  • Inner Circle
  • Online Workshops
LEARN MORE HERE