What are general risks of REITs?
As with any investment, REITs are not immune to risk. Some of these risks include, but are not limited to the following: (1) There is no guarantee regarding future performance and upon the sale or distribution of the REIT’s assets, stockholders may receive less than their initial investment; (2) real estate values can increase or decrease based upon economic factors, including interest rates, laws, operating expenses, insurance costs, unemployment, tenant turnover, and other considerations; (3) publicly-traded REITs, which are traded on national stock exchanges, are subject to stock market volatility; (4) Unlisted REITs, which are not traded on any national exchanges, do not have a public market and, as a result, may lack liquidity and transferability; (5) Distributions from REITs may be paid from offering proceeds, the sale of assets or borrowed funds; and (6) There are fees associated with investments in a REIT and those fees may affect the overall performance of the investment.
