Following our Report Card Series on REITs , we zoom in on the three things that investors should avoid when making investment in any REIT. These three factors can significantly improve returns by avoiding REITs that are not worth our investment.

1. Avoid Choosing REITs based on Dividends

It might sound counter intuitive, but investing in REITs shouldn’t be just focusing on the potential dividend yield of the REIT. What do we mean by that? First, ask yourself this question. Why does a troubled REIT like Sabana REIT have a double-digit yield of 11.8 percent in the past year compared to Keppel DC REIT’s 5.6 percent? Isn’t Keppel DC REIT supposed to be of better quality and growth prospects than Sabana REIT?

 

To answer that question, we first have to look at the total return that both REITs yield ......