Earn Up to 6% Yield by Investing in REITs

Since real estate companies borrow money to finance their purchases, rising rates could squeeze their profit margins.

Owning everything from office buildings to self-storage facilities, REITs rake in rents and must pay at least 90% of their taxable income to shareholders. As long as they can keep raising rents and dividend payments, the stocks should fare well. Indeed, REITs’ underlying properties should post a 4.5% average gain in operating income this year, fueling dividend growth in the “high single-digit” range, says investment firm Lazard.

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Daren Fonda
Senior Associate Editor, Kiplinger's Personal Finance
Daren joined Kiplinger in July 2015 after spending more than 20 years in New York City as a business and financial writer. He spent seven years at Time magazine and joined SmartMoney in 2007, where he wrote about investing and contributed car reviews to the magazine. Daren also worked as a writer in the fund industry for Janus Capital and Fidelity Investments and has been licensed as a Series 7 securities representative.