REIT Dividend Yield Calculator

REIT Dividend Yield

A REIT (Real Estate Investment Trust) must legally distribute 90% of taxable income as dividends to maintain tax-exempt status at the trust level. This makes them income-focused investments with naturally high yields.

The basic formula: Dividend Yield % = (Annual dividends per share / Share price) × 100

For quarterly REITs: Annual dividends = Quarterly dividend × 4

Typical REIT yield ranges (2026):

Compare yield to:

• 10-year Treasury yield (the “risk-free” baseline)
• S&P 500 dividend yield (~1.5-2%)
• High-yield savings account (HYSA, ~4-5%)
• Investment-grade bonds (~5-6%)

If a REIT yields less than the 10-year Treasury, you’re paying for growth potential. If it yields 3% above, you’re paid for the higher risk vs. Treasuries.

FFO (Funds From Operations): the better metric: REITs use depreciation aggressively, so reported earnings (EPS) understate real cash flow. FFO (or AFFO) is the true earnings metric: Price/FFO ratio is REIT equivalent of P/E ratio

Read the multiple by sector rather than as a single cheap-to-expensive scale, because the sectors trade in genuinely different places and always have. These are the same bands the FFO calculator uses, so the two pages agree about any given multiple.

An 18x multiple is not “premium” in the abstract. It is unremarkable for an apartment REIT and expensive for an office one.

Yield trap warnings: A very high yield (above 10%) often signals:

• Dividend at risk of being cut (payout ratio > 100% of FFO)
• Sector in distress (e.g., office REITs post-pandemic)
• Mortgage REITs leveraged into rate-rising environment
• Capital structure stress

Always check the FFO payout ratio. If FFO does not cover the dividend, the dividend will be cut.

Tax considerations:

• REIT dividends are mostly ordinary income: taxed at marginal rate
• Hold REITs in tax-advantaged accounts (IRA, 401k, Roth) when possible
• Some REIT dividends are “qualified”: verify with annual 1099
• 199A deduction (20%) applies to REIT dividends in non-qualified accounts (2017 TCJA)

REIT total return = Yield + FFO growth + multiple expansion The yield is just one piece. A 4% yielder growing FFO at 5% per year delivers ~9% total return without needing multiple expansion.