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How do REITs generate income?

Curious about REITs

How do REITs generate income?

REITs (Real Estate Investment Trusts) generate income through the rental income and capital appreciation of the properties they own and manage. The rental income is generated from tenants who lease or rent properties owned by the REIT. Additionally, some REITs may also earn income from property management and other real estaterelated services.

REITs are required by law to distribute at least 90% of their taxable income to shareholders in the form of dividends. These dividends may be paid out quarterly, monthly, or annually, depending on the specific REIT. As a result, REITs are known for providing a steady stream of income to investors.

In addition to rental income, REITs can also generate income through the sale of properties that have appreciated in value. This capital appreciation can result in a gain on the sale of the property, which can be distributed to shareholders in the form of a special dividend or reinvested into the business.

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