More and more Ohio residents are choosing to shop online, and e-commerce retailers like Amazon are luring them by offering competitive prices and short delivery times. Having locations throughout the country allows online sellers to improve efficiency and speed up order processing times, and the resulting demand for warehouse space could make certain real estate investment trusts a prudent place for investors to put their money.
Money has been flowing out of REITs in recent months as the high yields offered by this kind of security have become less attractive to investors. REITs are required to pay their shareholders at least 90 percent of their taxable income, but even returns like this find it hard to compete with equity markets when economic signals are healthy and interest rates are inching upwards.
However, there are a number of reasons why investors may still wish to consider REITs, and this could be particularly true if they contain warehouses located near densely populated areas like Cleveland, Akron or Columbus where the demand for space is expected to be fierce. A significant tax cut could also make REITs far more popular in the months ahead. The rate paid on income derived from REITs by top earners would fall to 16.5 percent if the tax plan proposed by President-elect Donald Trump is passed by Congress.
The returns offered by commercial real estate investments are sometimes significant, but mistakes can be costly for those who fail to perform adequate due diligence. Attorneys with experience in this area could compare the property portfolios of REITs and make recommendations to investors based upon an analysis of market conditions and prevailing trends. Attorneys could also help real estate developers to overcome the legal hurdles involved in moving projects from their planning stages to completion.Source: The Washington Post, Federal Reserve raises interest rates for second time in a decade, Jim Tankersley, Dec. 14, 2016