How To Buy REITs For Just 88 Cents On The Dollar


Real estate investment trusts (REITs) have become quite popular with income investors in recent years. And why not? These “retirement makers” are required to give 90% of their profits to their shareholders as dividends.

So, if you’re looking to retire on dividends, REITs are a natural place to look.

Problem is, their popularity comes at a price. The Vanguard Real Estate ETF (VNQ)
yields just 2.5% today—pretty lame by its standards.

A disappearing dividend isn’t the only problem with VNQ. Like most ETFs it tends to overweight the largest REITs, which typically translates into both lower overall yields and slower dividend growth. So, we’re left with a couple of options:

  1. We can “cherry pick” its holdings for hidden gems.
  2. Or we can buy REIT closed-end funds (CEFs) instead.

Option two is compelling today. Rather than buy an ETF at “par” or fair…

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