Lazy landlords: Why I’d buy REITs to make a passive income

first_img Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. “This Stock Could Be Like Buying Amazon in 1997” Our 6 ‘Best Buys Now’ Shares Simply click below to discover how you can take advantage of this. See all posts by Peter Stephens Image source: Getty Images. Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. Investing money in real estate investment trusts (REITs) could be a sound means of obtaining a generous passive income. In some cases, their prices have fallen in recent months so that they now offer high yields relative to other income-producing assets.Furthermore, investing in a REIT provides significant diversification and risk reduction. The wide range of properties they hold means that an investor is less reliant on a small number of assets for their income, which is often not the case with direct property investment.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…In the long run, REITs could offer worthwhile capital returns as investor confidence improves and the economic outlook strengthens.Making a passive incomeThe yields on offer from REITs are relatively appealing at a time when it is increasingly difficult to make a passive income elsewhere. The uncertain economic outlook has led many companies to reduce or even cancel their dividend payouts. Many others could follow in the coming months.Meanwhile, low interest rates mean that other income-producing assets such as cash and bonds offer returns that are lower than inflation in some cases. Therefore, holding them could lead to a loss of spending power in the coming years that negatively impacts an investor’s financial prospects.As such, buying a range of REITs today could be a simple means of obtaining a worthwhile passive income. Many of them have a long track record of dividend growth that could prove to be relatively resilient in the coming years.Reducing risksSome investors may have previously bought property directly to make a passive income. While this may have been a successful strategy, it can carry a significant amount of risk. The high cost of property means that building a diverse portfolio is a difficult aim for most investors. Therefore, they become reliant on a small number of assets for their income.By contrast, a REIT has a vast amount of assets. Often, they operate in different segments, such as leisure, retail and office properties. And, many REITs have exposure to different regions that further reduces their overall risk. This high level of diversification could mean that an investor enjoys a more robust income return that is less volatile over the long run.Capital growth possibilitiesSince many REITs offer generous passive incomes while interest rates are low, they could become more popular in future. This could be the spark that drives their share prices higher and lead to capital growth for investors.With the economic outlook being challenging at the present time, many REITs may also trade on low valuations. This may further improve their return prospects, and allow investors to benefit from their growth opportunities as well as their generous income return. As such, I’m thinking of buying REITs now and holding them for the long run. I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Enter Your Email Address Lazy landlords: Why I’d buy REITs to make a passive income Peter Stephens | Thursday, 29th October, 2020 last_img read more

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