7 Benefits of Owning REITs for Many Years

Many people invest in real estate by buying physical properties. But there's another route you can take -- buying REITs, or real estate investment trusts. Holding REITs for many years could work to your advantage. Here's how.

5 Stocks Under $49

Presented by Motley Fool Stock Advisor

We hear it over and over from investors, "I wish I had bought Amazon or Netflix when they were first recommended by The Motley Fool. I'd be sitting on a gold mine!" It's true, but we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Click here to learn how you can grab a copy of "5 Growth Stocks Under $49" for FREE for a limited time only.

Owning income properties means running the risk that you'll have to sink lots of money into things like maintenance and repairs. And you never know when your property taxes might go up. With REITs, you don't assume those risks, so they may be an investment that makes it easier to sleep at night.

ALSO READ: Why Now May Be a Good Time to Sell an Income Property

Owning rental properties means having to manage tenant issues and vacancies. REITs don't require anywhere close to that level of legwork. Once you do your initial research to determine which REITs to buy, you can sit back and do nothing else.

REITs are a good way to branch out in your portfolio if you feel you're too heavily invested in the same few market segments. In fact, within the realm of REITs, you can diversify by buying companies that operate different types of properties.

REITs are known to pay higher-than-average dividends. That's steady income you can look forward to and also use to keep building up your investment portfolio.

ALSO READ: Nearing Retirement? The 3 Best REIT Dividend Stocks to Buy Now

If you hang onto your REITs for many years, you may find that the value of your shares grows a lot over time. That gives you an opportunity to snag a nice profit once you're ready to sell.

5 Stocks Under $49

Presented by Motley Fool Stock Advisor

We hear it over and over from investors, "I wish I had bought Amazon or Netflix when they were first recommended by The Motley Fool. I'd be sitting on a gold mine!" It's true, but we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Click here to learn how you can grab a copy of "5 Growth Stocks Under $49" for FREE for a limited time only.

Many REITs trade publicly, and those that do are very liquid. That means you can sell your REIT shares easily should a need for money arise or your investing strategy change.

Because REITs pay large dividends and have the potential to gain value over time, they're a good way to protect yourself against the impact of inflation. In fact, you may want to consider loading up on REITs and holding them into retirement, when you might need help maintaining your buying power.

ALSO READ: What Is Inflation?

REITs are great investments for many reasons. But if you buy REITs, don't expect to dump them after a few years. Instead, plan to keep them in your portfolio for many years so that you get the maximum benefit from owning them.

The Motley Fool has a disclosure policy.