Real estate investment trusts (REITs) allow investors to reap all the benefits of being a landlord without the time, hassle, and huge financial commitment that comes with owning a physical property. Without having to change a single lightbulb, REIT investors get to receive rental income via quarterly or semi-annual REIT dividend payouts.

While REITs with a high dividend yield certainly look attractive, it is misleading to conclude that high dividend yield alone indicates a good REIT. Instead, investors need to do their due diligence and look into the other factors that determine the quality of a REIT.

The financial statements of a REIT (easily available on the REIT’s website) can tell you a lot about its financial health. Look for REITs that show consistent growth in gross revenue and net property income (NPI). Gross revenue for a REIT mainly comes from the rent collected