Suggestion by Tim Plaehn on 2008-03-02 23:09:01
I will start off with the easy one: I was pretty sure that historically REIT yields are higher than 10 yr. Treasuries. A quick google revealed the fact that REIT yields have been higher than the T-note about 2/3 of the time. Next, you completely failed to mention the tax structure of REITS, where they pay no corporate income tax if they pay 90% of their income as dividends. To me, REITs are primarily an income play with some capital gains possibilities if rents are increased, thus dividends or the market perceives the underlying real estate increases in value. This is quite different that the investor borrowing 90% to try to make 40% or better on their 10%.
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