Intuition tells us that with rising interest rates, real estate investments are increasingly risky and will result in lower and lower returns. But does this conclusion also apply to REITs?
A REIT provides the opportunity to indirectly put money into real estate via an entity that owns and operates income-generating properties (think residential rentals, hotels, commercial leases, etc.).
Equity REITs: These REITs generate income through rents paid. They have a low rate sensitivity. A strong management firm is vital to the success of an equity REIT.