Investing in REITs: Future of Real Estate Investment Trusts Remains Uncertain as Motley Fool Ranks Top 25 REITs in March 2013


We've monitored the growing interest in Real Estate Investment Trusts for awhile now, both for investment interest in Florida and REITs impact on the Florida economy, as well as the growth of REITs around the country as a whole. For details, see:

By October 2012, experts like Maxwell Drever were opining that the Florida real estate market was "terrific" and that Drever was planning on investing significantly in Florida within the short term -- to the tune of $100 million. Drever will do so via Concierge Asset Management, which he helms as its CEO; CAM focuses on three kinds of real estate investment now -- one of those three are REITs.

Real Estate Investment Trusts Are Bringing In Double-Digit Returns to REIT Investors

Which brings us to this week's forecast by noted financial analysts at Motley Fool. In an article entitled, "The 25 Highest-Yielding REITs in March," Dan Dzombak explains that the tax advantages of REITs include the ability to escape taxation by distributing almost all the REIT's income as dividends (90%) which means most real estate businesses these days are structured as real estate investment trusts these days.

American Capital Agency (for details, click above image) returned a dividend yield of 15.60% according to Motley Fool's study.

Of course, the investor who gets that REIT dividend must report that dividend at the higher tax rate (FIT rate). Who's gonna get dividends? Motley Fool provides a list of the 25 highest-yielding REITs that have a market cap of $1 billion+. The top five are:

  1. American Capital Agency
  2. ARMOUR Residential REIT
  3. American Capital Mortgage Investment
  4. Annaly Capital Management
  5. Two Harbors Investment

Motley Fool's bottom line: REITs these days are offering "seemingly irresistible yields" but they may be "ticking time bombs."

With yields ranging from 12.6 at Two Harbors and 15.20 at American Capital Agency, those are very tempting investments, indeed. Time bombs? Bigger question for real estate investors to answer.


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