By Jack Hough; After a Long Rally, It's Time to Get Choosier With REITs
Real-estate investment trusts have racked up handsome gains, leaving the sector looking pricier than usual.</br></br>That isn't necessarily a reason to exit the REIT market, but investors should favor the pockets that still look affordable.</br></br>Think warehouses, not apartment buildings.</br></br>REITs buy mostly income-producing property and avoid paying taxes on the income so long as they pass the bulk of it to shareholders as dividends. With REITs, investing in a diversified pool of real estate is as easy as buying shares of stock.</br></br>This column made a case for REITs last year ( " Oct. 1). Financing rates for property buyers are low, and in many markets, demand from tenants is strong and supply is growing only modestly.