What this calculator shows you
- Real REIT Data
- Uses actual dividend yields and historical growth rates from popular REITs.
- Dividend Reinvestment Toggle
- See how DRIP accelerates your income growth over time.
- Income Growth Projection
- Visualize how your monthly passive income grows year over year.
- Portfolio Value Chart
- Track total portfolio value including both appreciation and reinvested dividends.
What are REITs?
Real Estate Investment Trusts own and operate income-producing real estate. By law, they must distribute 90% of taxable income as dividends. This creates reliable income streams typically yielding 3-8% annually.
Types of REITs
Equity REITs: Own physical properties (apartments, offices, malls). Mortgage REITs: Own real estate debt. Specialty REITs: Focus on specific sectors like data centers, healthcare, or cell towers.
The Power of DRIP
Dividend Reinvestment Plans (DRIP) automatically buy more shares with your dividends. This compounds your income—you earn dividends on your dividends. Over 20 years, DRIP can more than double your ending income.
Questions people ask
Are REIT dividends taxed differently?
Yes, most REIT dividends are taxed as ordinary income, not qualified dividends. This makes REITs ideal for tax-advantaged accounts like IRAs. Consult a tax professional for your specific situation.
How do REITs perform in recessions?
REITs can be volatile during economic downturns, especially retail and office REITs. However, essential sectors like healthcare and residential tend to be more stable. Diversification across REIT types reduces risk.
Should I reinvest dividends or take the cash?
If you do not need the income now, reinvesting accelerates wealth building. If you are retired or need income, taking cash makes sense. The calculator shows both scenarios.
Education only, not personalized financial, tax or investment advice. Results are estimates based on the numbers you enter; real returns vary and losses happen.