Real estate soaring, but for how long?

reit-coins

By reit-coinsJohn Waggoner | USA TODAY

If you’ve ever tried to sell a house, you know that it’s only slightly less complex than forging a Middle East peace agreement. You have to deal with contractors, agents, inspectors, mortgage brokers and bankers, all of whom can make North Korea look like pretty darn flexible negotiators.

For this reason, many people prefer to buy real estate through real estate investment trusts, which invest in commercial real estate. Owning REITs has several side benefits as well: They tend to pay decent dividends, and they’re a good way to diversify a portfolio, too.

The only problem: They’re not particularly cheap. This doesn’t mean that the whole sector will go tumbling down next week, or even in a year. But it does mean that their red-hot performance is likely to cool down a bit.

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