Real Estate Risks and Rewards

Historically, REITs have generated total returns that have kept pace with the broader stock markets over the long term with less volatility. However, there are a number of risks that you should keep in mind when investing in REITs. Property values may fall due to increasing vacancies or declining rents during difficult real estate market periods. Many REITs finance their activities by borrowing or issuing debt, a practice that can increase investment risk, especially during periods of rising interest rates. In addition, REITs are subject to general market risk associated with any type of stock.

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