Selecting a REIT: Factor in capital gains and dividend payouts

REITs provides investors many benefits hitherto unavailable to investors, especially, retail investors – the key benefit being portfolio diversification. REITs allows investors to diversify their portfolios beyond stocks and bonds into real estate, sans the extra burden of managing physical real estate.

REITS, by virtue of their constitution, mandatorily pay out 90% of their cash flows as dividends, making them excellent investment vehicles where investors desire a stable cash flow. Investors also benefit from professional management that REITs employ to manage their assets, which investors may not be able to afford in case of direct investments in real estate.

Finally, REITs are more liquid compared to real estate since they are listed on stock exchanges, and have minimal entry and exit cost. - Business Standard