Did you know there are such things as REIT ETFs? Exchange Traded Funds are known for tracking a variety of securities like stocks, indices, bonds, or commodities, one of which being real estate. In this way, while some ETFs invest their assets in real estate, others invest in real estate investment trust equities, becoming REIT ETFs.
A real estate investment trust is a security that behaves like a stock and invests directly in real estate via mortgages or by purchasing properties. REITs have many advantages like some tax exemptions, they offer high dividend yields to investors and they represent a much more convenient way to put your money into real estate, since they have a higher liquidity than physical real estate. According to the way in which a REIT invests we can differentiate between REITs that actually acquire properties and earn revenues from using their real estate (for example: renting), and REITs that deal with real estate mortgages.
Exchange Traded Funds are usually chosen by investors because of the diversification they provide combined with the possibility to speculate through ETF share price variation and lower costs and fees in comparison with other investment funds. However, choosing to invest in a REIT ETF or other real estate ETF has one more advantage which is a high dividend yield.
With this in mind, we have compiled a list of the ten highest paying real estate and REIT ETFs in terms of dividend yield, in a style similar to our list of short ETFs. Highlights from our list include iShares FTSE NAREIT Mortg.REITIn Fd(ETF) (NYSEARCA:REM) and ETRACS Monthly Pay 2XLeveraged Mortgage REIT ETN (NYSEARCA:MORL).