Select the value to solve, then enter the two requested values for a consistent annual period and return basis.
Return on REIT Formula
The main formula for return on REIT measures the annual dollar return as a percentage of the total amount invested in the REIT.
Rearranged formulas used by the calculator (the investment inverse requires a nonzero rate and a positive implied investment; zero rate with zero dollar return has no unique inverse):
- Return on REIT is the annual return percentage from the REIT investment.
- Annual Return is the dollar amount earned from the REIT over one year.
- Total REIT Investment Amount is the total dollar amount invested in the REIT.
If you enter annual return and total investment, the calculator finds the return on REIT percentage. If you enter return on REIT and total investment, it finds the annual dollar return. If you enter annual return and return on REIT, it finds the investment amount needed to produce that return.
Common REIT Return Ranges
Actual REIT returns vary by property type, interest rates, management, debt levels, occupancy, and market price changes. The table below contains illustrative numerical bands, not evidence-based performance benchmarks or investment recommendations.
| Annual Return on REIT | General Interpretation | What to Check |
|---|---|---|
| Below 3% | Illustrative band below 3% | Dividend yield, price decline, fees, or short holding period |
| 3% to 6% | Illustrative 3%–6% band | Dividend consistency and property sector performance |
| 6% to 10% | Illustrative 6%–10% band | Whether the return is from income, price growth, or both |
| Above 10% | Illustrative band above 10% | Leverage, payout ratio, sector risk, and sustainability |
Example Calculations
Example 1: Calculate return on REIT
You invested $20,000 in a REIT and earned $1,400 over one year.
The annual return on the REIT is 7%.
Example 2: Calculate annual return
You invested $35,000 in a REIT with an annual return on REIT of 5.5%.
The annual return is $1,925.
FAQ
What should count as annual return for a REIT?
Annual return can include dividends received during the year plus any change in the value of the REIT position if you are measuring total return. If you only want income return, use dividends only. Be consistent with the method you choose, especially when comparing multiple REITs.
Is return on REIT the same as dividend yield?
No. Dividend yield only measures dividend income relative to price or investment amount. Return on REIT can include both dividends and capital gains or losses. For example, a REIT may have a 5% dividend yield but a total return of 2% if the share price falls during the year.
Can return on REIT be negative?
Yes. If losses are larger than income, the annual return can be negative. For example, if you receive $800 in dividends but the REIT value drops by $1,500, your total annual return is negative $700.
