Advantages of Real Estate Investment Trusts
Real Estate Investment Trusts (REITs) are a wonderful (and often the only) way for private investors to build a broadly diversified, global real estate portfolio.
The major advantage of REITs lies in the tax benefits, depending on the tax legislation of the respective home country of the REIT stock corporation. In return, the companies must fulfill certain state requirements. As the law in Germany, for example, requires at least 90 % of profits to be distributed to shareholders, investors receive correspondingly high dividend payments.
For example, there are REITs in the USA and Canada that distribute monthly dividends and thus provide investors with a steady income. However, like all other exchange-traded investments, REITs are of course also subject to fluctuations on the stock markets and therefore to corresponding risks.
Constant availability and disclosure requirements (corporate governance regulations/IFRS) due to trading on stock exchanges
High dividend payout compared to conventional shares, because the company receives higher earnings due to the tax benefits
Low correlation to the stock and bond market and therefore well suited for portfolio diversification
No issue surcharge as with open real estate funds, there are only the usual CapTrader favorable Share order fees to
Prescribed minimum distribution ratios for REITs, e.g. USA 90%, Australia: 100%
German REITs are not allowed to invest in residential properties, but can invest in shopping centers, hotels or office buildings instead
US REITS can be traded from 2.00 USD/order, German REITS from 2.00 EUR/order.
No fee for dividend credits at CapTrader! (Dividends are credited to your CapTrader account minus withholding tax)
At least 75% must be invested in real estate and land, the rest may be invested in bank deposits or other investments
What are Real Estate Investment Trusts?
REITs (short for Real Estate Investment Trust) is an investment vehicle that allows investment in real estate based on exchange-traded shares and could be translated as a type of real estate equity fund. REIT companies invest to a large extent in real estate and land and thus generate income from renting, leasing and also the sale of real estate. In Germany, REITs have only been permitted since 2007, whereas in the U.S., private investors have been able to invest in REITs since the 1960s. They were introduced, among other things, to give small investors access to indirect real estate investments. Today, around 200 REITs are listed on the New York Stock Exchange. REITs are subject to country-specific laws.
Investment in REITS
Geldanlage in REITS by Luis Pazos treats the German's favorite child - real estate - in a light that is still completely unknown to many.
Already from 2 USD: Favorable conditions at CapTrader
REITs can be traded worldwide at CapTrader at favorable conditions trade. US REITS can be traded from 2.00 USD/order, German REITS from 2.00 EUR/order.
In addition to a capitalized securities account, the only requirement is a trading permit for stock trading. How to obtain this trading permit (retrospectively), you will learn here.
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Use Real Estate Investment Trusts (REITs) at CapTrader to build a broadly diversified, global real estate portfolio and benefit from our favorable conditions.