High yielding dividends often come with caution signs for investors because an unusually high dividend usually means the market doesn't think the payout will last. And if we were looking at dividend yields over 6% in energy or technology that theory might be right. 

But in the world of real estate investment trusts (REITs) a high dividend yield isn't as much of a problem because REITs are required to pay out at least 90% of their earnings, and the underlying asset often increases over time. If companies own assets that will generate predictable cash flows for decades to come it may be advantageous to have a high dividend yield. And Gaming and Leisure Properties Inc (NASDAQ:GLPI), Colony NorthStar Inc (NYSE:DBRG), and Apple Hospitality REIT Inc (NYSE:APLE) are built to succeed long-term. 

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Gamble on this dividend

REITs are fairly new to the industry and Gaming and Leisure Properties was one of the first to be introduced in 2013 when it was spun off from Penn National Gaming (NASDAQ:PENN). The company now owns the real estate assets of Penn National and "substantially all" of Pinnacle Entertainment's (NASDAQ: PNK) real estate assets, which it purchased in 2016. 

The agreements with gaming operators provide predictable rent cash flows for the REIT, which then funds the dividend. As long as the gaming industry in the U.S. continues to improve slowly but surely the business and dividend are in good shape. The biggest risk is a big downturn in gaming that leaves Penn or Pinnacle bankrupt, but they actually have a lot less debt now after spinning off their real estate to Gaming and Leisure Properties. 

In the last twelve months, Gaming and Leisure Properties has generated $2.41 per share in funds from operations, a measure of the cash REITs spit off over time. The dividend of $2.44 per share is slightly above FFO, but FFO is also growing after the Pinnacle Entertainment acquisition in 2016. The dividend may fluctuate slightly ensure that FFO can fund the payout, but with a yield of 6.7% and a growing gaming industry around the U.S., this is a high yield stock worth betting on. 

Global real estate play

Colony Northstar isn't just a REIT, it's an investment firm that owns REITs and other financing structures like investment management. It has five operating segments, healthcare, industrial, and hospitality real estate along with other equity and debt and investment management. 

The structure and diversification of industries give the company a broad exposure to the economy, primarily across the U.S. and Europe, and the slowly improving economy. And investment management is a fee-based business that controls $40.3 billion of assets under management. 

Colony Northstar is the product of a merger of Colony, something, and Northstar earlier this year, so trailing twelve month FFO isn't indicative of ongoing operations. Second quarter core FFO was $0.34 per share, exceeding the $0.27 per share dividend declared for the quarter. The dividend yield is currently a whopping 8.1%, backed up by the company's massive real estate portfolio and strong cash flow. If you're looking for a diverse way to play the real estate market with a high yield, this is a great stock to pick. 

Raising the room rates

Apple Hospitality is the owner of the real estate hotels like Embassy Suites, Hampton, and Marriott operates in. The company has a portfolio of 235 hotels with about 30,000 guestrooms in 33 states. 

Hotel revenues generally improve along with the overall economy and since the recession room rates and occupancy have been rising. That creates an ideal environment for a REIT like Apple Hospitality to grow cash flow and its dividend. 

The dividend yield currently stands at 6.7% and the payout of $1.20 annualized has been flat since the beginning of 2016. But FFO for the last twelve months was $1.61 per share, meaning there's room to increase the dividend in the future or absorb a decline in room rates or occupancy. While it isn't the hotel operator, Apple Hospitality's revenue is directly affected by the revenue hotel managers can generate. Ultimately, a decline in hotel revenue is the biggest risk to Apple Hospitality's dividend. 

There is also some concern that competitors like Airbnb may take business from major hotel chains, but in 2016 room rates were up 3.3% and occupancy was flat. New competitors may be a growing option, but I think there's a place for hotels in the market, and owning a hotel REIT is a great way to generate cash flow from the steady growth of the economy and rising appetite to travel and stay in hotels. As part of a balanced portfolio, this is a great yield to hold. 

One risk all REITs face

One risks all REITs face that investors need to consider are rising interest rates. If rates rise the cost of servicing mortgages goes up and the dividend could go down as a result. With that said, investors have been worried about rising rates for nearly a decade and they haven't come to fruition. But they're a risk worth keeping an eye on if you're jumping into these high yield REITs. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.