REIT Dividends

A REIT's dividend yield is only attractive if it is sustainable and, preferably, able to be increased over time. This chapter discusses how to calculate a REIT's yield, as well as how to quickly assess the dividend's sustainability. Also, because investors pay the taxes on the income REITs dividend out to them, this chapter addresses REIT dividend taxation. Last, this chapter highlights the risks and rewards associated with investing in preferred stock of REITs. Preferred dividends provide a premium yield to common dividends of the same REIT, but there are several potential risks of which investors need to be aware before investing in preferred stock of any REIT. The chapter ends with a case study of Rockland REIT, a fictitious organization used for illustration purposes.