Who Should Invest in REITs?

Income investors: REIT units offer attractive yields and a relatively steady income stream making them a suitable portfolio component for most income investors, though income investors should be aware that REITs are an equity investment with fluctuating unit prices.

Investors seeking tax benefits: REITs offer three major tax benefits:1) pre-tax income flows through to investors, 2) investors get favourable tax treatment on the income, and 3) a component of the tax obligation is deferred until the units are sold.

Growth Investors: While the first two priorities are stability and income distribution, Canadian REITs have proven to be solid growth investments by bringing financial strength, industry acumen and innovation to previously untapped opportunities. With most REITs,investors have the option to reinvest distributions through a distribution reinvestment plan (DRP) to compound the growth potential of the investment.

RRSP, RRIF, RESP, DPSP: REITs are 100% eligible as Canadian content for registered portfolios.

Leverage investors: Interest on investment loans is tax deductible and distributions can be used toward loan repayment.

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