Published on 10 Oct 2022 on Benzinga via Yahoo Finance
REIT Classifications: When investing in real estate investment trusts (REITs), it is important to understand the two main types: mortgage REITs and equity REITs. Mortgage REITs generate income by underwriting or purchasing mortgages for the operators of the real estate. While equity REITs typically earn income through the rents of their tenants on their real estate assets.
A benefit to investing in mortgage REITs is that they typically have higher yields than equity REITs, with a five-year average dividend yield of 10.8% amongst the various REIT sectors, as reported by S&P Global.