For many income seekers, real estate investment trusts (REITs) have long been prized for their high yields. Due to their tax structure, REITs pay no corporate tax on real estate-related business dealings. Because of that fact, they are required to push much of their cash flows back to investors as dividends. As a result, the sector offers above-market average yields.
However, since the Republican Tax Plan was enacted in 2017, some of REITs’ appeal for dividend investors has been dented. Other income alternatives have simply become more popular. And when you add in the effects of the pandemic on various real estate subsectors, it’s easy to see why REITs haven’t exactly been a top draw the last couple of years.
But that could be changing.
The next item on President Biden’s list is taxes. And while his plans are widespread, corporate taxes are a major concern. In that, REITs could be the sector du jour for investors looking for income and dividends.
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