Related Reddit thread about this
BTW: I am just sharing the details and it is not my opinion/research.
Buying rental properties is better than REIT, REIT is better than stocks. Just as I have been saying all the time
Rental > REIT > S&P500
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From what I understand, REITs’s dividend is taxed at marginal tax rate. But capital gains/dividends are taxed at a much smaller rate.So doesn’t it mean that assuming the chart is correct, stock gains are better than REIT gains? So my thumb rule so far has been that:
- REITs and bonds belong in 401ks.
- Stocks belong in taxable accounts.
Am I missing something with my understanding?
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REITS are for amateurs…Whole ownership for pros
I started buying REIT’s 6 months ago. I want to have a passive income stream. My rentals are just starting to break even and mostly bought for appreciation. For income I concluded I will buy REIT’s. The tax issue is fine for me. My stand on taxes has always been: I only pay taxes when I make money. So I am mostly cool with it.
I only have 2 REIT’s so far: OHI and MPW. Both in the healthcare sector although they focus on different areas. Starting next year I have narrowed down 3 more candidates: BXMT, STWD and NRZ. Still need to do more research on them. So potentially I will have 5 REIT’s in my portfolio going forward. I put a set amount of money into them every month.
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Yes, REITs dividends are not qualified and it is considered as income for owner, does not help high earners. They are attractive to tax advantaged accounts or people with low income or retired people.
I think REIT dividend can be treated as pass through income, is it right? If so, better buy REITs quickly. Mass population could be a few steps behind, better act faster.
Also can you automatically reinvest REIT dividend?
Any changes to reit taxation with the new tax law of pass thru income ?
Yes.
ownership is of course greater than REIT, you can take mortgage, and leverage in a very safe manner.
I just read that in tax reform REIT dividend will be treated the same way as pass-thru income. That means the first 20% is free, the rest taxed at marginal rate. The new law will save you quite a bit.
I see the post here, but do not understand what is the first 20% and later percentages?
Any example?
My Return since 2007 (10 years!)
US Large Cap 163%
US Small Cap Value 107%
Foreign Developed 22%
Foreign Emerging 50%
China ETF 41%
REIT 46%
Everything fell short of the plain vanilla S&P500 fund… 
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How did you get the 46% return for your REIT fund? Did you forget to account for dividend income and dividend reinvestment? Also is your REIT fund an index fund for all REITs?
Research shows that REIT beats SP500, your number contradicts that.
Same questions on other funds. Are these vanguard fund? Or did you choose specific mutual funds?
And did your overall portfolio beat SP500 in the last 10 years?
See inserts above
I guess I will stick with SP 500 … stock picking gives me a headache… might pick up some dividend stocks like BP.
The only Reiits I like are multi family…
I put most of my excess cash in hard money… Steady 8%
returns, and syndicate deals…
Yes, stick with what you are good at. 
Historical return of S&P is between 7-11%.
JP Morgan has selected the timeframe such that return of REIT is higher than S&P’s.
It is possible to select a timeframe to show the reverse
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JP Morgan says that the “average investor” got a 2.1% annual return in the last 20 years, lower than inflation. I’m curious how they track an “average investor”? Is the “average investor” JP Mogran client?
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Yes, they just shot themselves in the foot. Nobody would what to give money to JP Morgan anymore after reading that… 