Investing in REITs: Real Estate Investment Trusts, 4th Edition

Bonds

Bonds, particularly high-yield, or “junk,” bonds, usually provide higher yields than the average REIT stock, but the investor gets only the interest coupon and no growth potential. Bonds do offer something that REITs cannot provide: a promise of repayment of principal at maturity so that, in the absence of bankruptcy or other default, investors will always get back their investments. It is this feature that makes the comparison between REITs and bonds less meaningful. For that reason, if absolute safety of capital is paramount regardless of the cost in total return or protection against inflation, REITs may not be the ideal investment for you. But let's look at the returns each can provide.

With bonds, what you see is what you get: pure ...