On top of this, they’re more tax-efficient than other dividend stocks. And that can be a big advantage when it comes to returning cash to shareholders. 

Tax

REITs were originally brought into existence in the US to make a booming property market accessible to ordinary individuals. And in a meaningful sense, this is exactly what they do.

Being required to return their rental income to investors as dividends naturally limits their growth opportunities. But in exchange, they don’t have to pay taxes on their profits. 

For passive income investors, that’s a big advantage. With other dividend shares, the firm pays tax on its profits before it can return what’s left to investors. 

That makes dividends an inefficient way to get cash out of a business, especially for investors without a Stocks and Shares ISA. Companies pay tax on their profits and shareholders pay tax on their income.

This might not sound like much, but it shouldn’t be underestimated. For Diageo, the difference between its annual pre-tax profit and its net income is around £1bn. 

That’s almost two-thirds of the amount the firm sends out in dividends each year. So for a REIT, not having to pay this is a big advantage.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

Housing

For investors looking to get into the buy-to-let market, The PRS REIT‘s (LSE:PRSR) an interesting alternative to think about. It has a portfolio of just under 5,500 houses, mostly in the North West.

The occupancy rate’s around 96% and the firm collected 99% of the rent it was due in the last three months. And the majority of its tenants have household incomes above £36,000. 

Those are positive signs for future income and there’s more to like as well. Strong Energy Performance Certificate (EPC) ratings on relatively new homes should mean it stays ahead of changes in regulations for some time.

There’s a shortage of UK housing at the moment – including rental housing. And that very much helps PRS in terms of its ability to increase rents each year. 

The UK government however, is attempting to do something about this. And if it succeeds in getting near its ambitions, then this could create a challenge for existing property owners. 

That’s something to keep in mind. But the company has been increasing its dividend recently, there’s a current yield of just under 4%, and it’s fully covered by the firm’s earnings.

Buy-to-let?

I think REITs should be on every dividend investor’s radar. The significance of being able to distribute cash to investors without being taxed on it shouldn’t be underestimated.

Specifically, The PRS REIT could be a nice alternative to the buy-to-let market. For anyone with a positive long-term view of UK housing, I think considering it is a good idea.

It’s a lot less work and investors can start buying shares with as little as £1. And a ready-made portfolio of quality houses could be a valuable asset over the long term.

The post Why every passive income investor should have REITs on their radar appeared first on The Motley Fool UK.

Investors today have hundreds of such financial vehicles to choose from depending on their investment style and objectives. So they don’t need to diversify across a basket of assets without having to sacrifice their broader investing strategy, either.

With this in mind, here are three top trusts and funds to consider.

The property trust

Real estate investment trusts (REITs) like The PRS REIT (LSE:PRSR) are renowned as stable and generous income shares. This company — which specialises in the ultra-stable residential rentals sector — offers even more safety, as accommodation demand remains steady at all points of the economic cycle.

Under REIT rules, it must pay at least 90% of annual earnings from its rental operations out in dividends. For this financial year (to June 2026) its dividend yield is a FTSE 100-beating 4.4%.

PRS REIT’s share price could dip again if interest rates fail to drop as significantly as the market hopes. Higher rates depress property stocks’ net asset values (NAV) among other things, hitting earnings.

But given steadily rising rents, I’m confident it will remain an attractive long-term dividend stock.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.

A UK shares trust

Investors looking for larger yields might want to consider Chelverton UK Dividend Trust (LSE:SDV), too. Its forward dividend yield is an impressive 9.4%.

The downside is that this investment trust is focused on small-to-mid-sized British companies. This is a potential issue as — unlike blue chips with stronger balance sheets — their dividends can be more volatile during economic and industry downturns.

That said, Chelverton’s investment in a broad range of businesses helps to spread this risk. Today it has holdings in 66 companies including insurer Chesnara, building materials retailer Wickes, and antenna manufacturer MTI Wireless Edge.

This has enabled the trust to raise annual dividends for 14 years on the bounce.

An alternative ETF

The Invesco US High Yield Fallen Angels ETF (LSE:FAHY) doesn’t invest in the stock market. This means its price performance isn’t subject to the same volatility that often befalls equities.

Instead, this trust holds corporate bonds that have been downgraded to below-investment-grade status. It’s a strategy that leaves it more exposed to default risks. However, this also gives the opportunity to achieve higher returns through better dividend yields.

For 2025, the dividend yield here is a chunky 6.7%.

This Invesco fund also aims to reduce potential default risk on overall returns by holding a wide selection of bonds. Today, this stands at 70. In addition, no single holding constitutes more than 3.76% of the total portfolio.

Some of the bonds it holds are from healthcare provider CVS Health, media company Paramount Global, and aluminium business Alcoa Nederland.

The post 3 high-yield investment trusts and ETFs to consider to target a lasting passive income appeared first on The Motley Fool UK.

The sector has kept delivering for those individuals chasing a second income, broadly speaking. This reflects partly REIT rules requiring the lion’s share (90%) of annual rental profits to be distributed to shareholders.

However, the share prices of these property stocks have weakened following recent central bank actions. Higher interest rates in 2023 and 2024 hammered these companies’ net asset values (NAVs) and raised their borrowing costs.

Time to invest?

Yet, with interest rates falling, now could be a good time to consider buying shares in these dividend-focused investment trusts. Here are three to consider for a long-term passive income.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.

Top marks

Unite Group (LSE:UTG) is a leading player in the purpose-built student accommodation (PBSA) segment. Not only is this a defensive part of the property market. It’s one where rents are booming as tenant numbers rapidly rise.

Like-for-like income here jumped 7% in the six months to June, latest financials showed. This reflected both robust occupancy and rental growth.

Earnings are naturally sensitive to university enrolment levels in the towns where Unite operates. However, its wide geographic footprint helps reduce this threat (it currently operates in 23 UK cities).

Furthermore, the FTSE 100 stock’s planned £723m takeover of Empiric Student Property will (if successful) further diversify its portfolio and boost its earnings prospects, too.

Safety first

Self-storage trusts like Safestore (LSE:SAFE) have enormous growth potential, driven by trends like:

• A growing urban population, resulting in smaller living spaces
• Individuals moving home more frequently
• A rising culture of ‘hoarding,’ where people accumulate possessions
• People decluttering and relocate items from the home
• The growth of online shopping, raising storage demand from e-retailers

Safestore is one of two REITs operating in this area. I like this particular one because its 200 stores span the UK, Spain, France, The Netherlands, and Belgium, meaning it carries less geographic risk than companies operating in one country.

While the long-term picture is bright, be mindful that rental growth and occupancy rates can disappoint during economic slowdowns.

Home comforts

Rents on residential properties have slowed considerably of late. But a steady exodus of buy-to-let investors means the outlook for companies like the PRS REIT (LSE:PRSR) remains encouraging.

This trust holds a portfolio of roughly 5,500 homes. It’s also focused on the family homes segment where shortages are especially acute. Consequently, like-for-like rents on stabilised sites rose 9.6% over the 12 months to June, greater than the broader rentals market.

According to the Royal Institution of Chartered Surveyors (RICS), the number of new properties entering the market last month fell at its sharpest pace since the Covid-19 pandemic. This is a positive omen for PRS REIT over the short term and beyond.

A potential change in rental regulations might dampen the trust’s future returns. But so far, conditions in this highly stable sector remain favourable.

The post 3 top REITs to consider for long-term passive income appeared first on The Motley Fool UK.

Hot property

Rental growth at residential property companies like The PRS REIT (LSE:PRSR) have slowed in recent times.

For this real estate investment trust (REIT), average like-for-like rental growth fell to 10.8% in the six months to December. This was strong, but down from 11.7% in the prior six months.

Yet, it’s believed the market may have reached an inflection point, as the number of buy-to-let investors declines and supply levels drop. The Royal Institution of Chartered Surveyors (RICS) reported a score of -21 for June for the number of new properties available for rent. This marks a steady monthly decline dating back to summer 2022.

Property shortages are especially chronic in the family homes sector in which PRS REIT operates. Though risks remain from interest rates, the possibility of receding inflation and those rising rents makes the company worth a serious look.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.

Streaming star

The near-term outlook for ITV (LSE:ITV) isn’t nearly as encouraging today. WPP‘s shock profit warning this week underlines weakness in the advertising industry, a key source of revenues for commercial broadcasters.

The Institute of Practitioners in Advertising’s (IPA) latest Bellwether Report similarly casts a downbeat picture. This showed UK companies as a whole cut their marketing spending in quarter one, the first such drop since 2021.

However, I think the threat of prolonged weakness may be baked into the cheapness of ITV shares. They change hands on a forward-looking price-to-earnings (P/E) ratio of 8.3 times.

I see strong long-term potential for the broadcaster as the streaming revolution continues. Revenues at its hit factory ITV Studios are rising strongly as streaming companies like Disney, Netflix, and Amazon compete for new content. And viewing and user numbers for its own ITVX streaming platform continue to grow at an impressive pace.

Defence giant

The broader defence sector has continued performing strongly in 2025. But QinetiQ (LSE:QQ.) shares have been more volatile than anything else following a profit warning in March.

It explained that tough conditions in the US would see it take a £140m restructuring charge. The contract delays it’s recently experienced are an ever-present threat for businesses like this.

Yet, on balance, the outlook over a longer time horizon remains highly encouraging, at least for this stock, as the world rapidly rearms to counter perceived threats from Russia and China. The picture is especially bright in the UK, where QinetiQ sources almost 70% of total revenues. The company sees a £6bn market opportunity in its home territory alone.

The FTSE 250 firm has its fingers in many pies. It builds drones, provides cybersecurity solutions, makes surveillance sensors, and trains personnel for military scenarios. This expertise provides it with multiple growth opportunities as its global customers ramp up spending.

The post 3 FTSE 250 shares to consider for a Stocks & Shares ISA! appeared first on The Motley Fool UK.

To that end, I’m always scanning the UK market for high-quality, dividend-paying shares to add to my portfolio. Lately, one area in particular has caught my attention: FTSE 250 real estate investment trusts (REITs). These property-focused companies offer consistent income potential and the added benefit of asset-backed stability.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.

As interest rates stabilise or fall, financing for property development is likely to become more affordable, encouraging expansion. The FTSE 250 typically hosts domestically-focused companies such as specialist REITs, which are better positioned to capitalise on these trends.

Here are three such stocks to consider as part of a reliable second income over the next decade.

British Land

With a market-cap of £3.86bn, British Land (LSE: BLND) is the largest REIT on the FTSE 250 and a significant player in the UK property market. In fact, its enterprise value (EV) of £6.5bn is equivalent to some FTSE 100 constituents, such as Diploma and St James’s Place.

British Land’s 5.9% dividend yield, coupled with a low payout ratio of 40%, makes it a compelling income pick. This low ratio suggests the firm has enough earnings to weather downturns and invest in growth – key traits I look for in an income stock.

Risk-wise, it’s exposed to the broader commercial property market, which could suffer if interest rates remain high or demand for office space declines. But for now, its scale and discipline make it a cornerstone of my second income strategy.

Primary Health Properties

Primary Health Properties (LSE: PHP) is a specialist REIT with a £1.38bn market-cap, focused on leasing properties to NHS organisations and other healthcare providers. It’s a niche business with a reliable client base, helping it grow by 7.28% over the past year.

Its 6.8% dividend yield is one of the highest among REITs. However, this level of income comes with a caveat: the payout isn’t well covered by earnings. Moreover, it trades at a high price-to-earnings (P/E) ratio of 33.4, which may limit near-term growth and raise some concerns around valuation.

Still, the healthcare property sector tends to be more resilient in economic downturns. This helps balance the risk for long-term investors like me.

PRS REIT

If there’s one REIT that looks like an emerging income star to consider, it’s the PRS REIT (LSE: PRSR). With a focus on the private rental sector, it has seen its market-cap climb 50% in the past year to £630m.

Its dividend yield is the lowest of the three at 3.57%, but what stands out is the earnings coverage – over five times the payout. The trust also trades at a P/E ratio of just 5.7, which suggests it could be significantly undervalued relative to its earnings potential.

The main risk here is scale. As a smaller REIT, this firm is more sensitive to changes in tenant demand and regional property trends. But with the UK rental market remaining tight, I believe the long-term outlook’s favourable.

The post In the next 10 years, I’ll aim to earn the most second income from this area of the FTSE 250 appeared first on The Motley Fool UK.

Here’s why.

Safety play

As its name implies, this FTSE 250 stock’s categorised as a real estate investment trust (REIT). By specialising in supplying “high-quality, new-build family homes for the private rental market“, the trust operates in the most stable property sector out there.

Latest financials showed rent collection at 101% in the three months to March. Property occupancy meanwhile, was also impressive, at 96%.

PRS is supported by consistent demand for housing, which doesn’t fluctuate with the economic cycle. But this isn’t the only reason why earnings are stable from year to year. Its focus on the family home sector, where the gap between supply and demand is especially acute, gives the trust added strength.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.

Rents boom

Let’s forget about the excellent defensive appeal of this residential property stock for a moment though. I think considering PRS shares could be a good move given the rapid pace at which private rents in the UK are growing.

Like-for-like rents on stabilised sites rose an impressive 10% year on year in the three months to March. The rate of growth has slowed more recently — rents were up 12% in the corresponding quarter in 2024 — but I’m expecting levels to remain well supported as tax and regulation changes worsen the housing crunch.

Data provider TwentyCi says that “the volume of all properties to let has hit yet another all-time low, with just 284,000 properties currently available across the whole of the UK“. An intensifying exodus of buy-to-let investors means property supply fell 18% year on year during the first quarter of 2025.

Dividend growth

Against this backdrop, City analysts expect PRS REIT’s earnings to rise 15% in the current financial year (to June). The trust’s tipped to follow this up with growth of 6% and 7% respectively.

Expectations of rising rental income lead brokers to expect consistent dividend growth over the period too.

With dividend cover below one, the business has kept annual payouts locked at 4p per share in recent years. But with earnings tipped to finally breach this level from this year, cash payouts are projected to grow once more:

As a consequence, a solid 3.6% dividend yield in fiscal 2025 rises to 3.9% and 4% for 2026 and 2027 respectively.

A top trust

Despite its defensive qualities, PRS REIT isn’t without risk. Net asset values and borrowing costs remain sensitive to broader interest rate movements. Therefore, any uptick in inflation could have damaging consequences for the company.

Changes to rental legislation could also pose a threat to future shareholder returns. But with no such hazard currently on the horizon, and inflationary pressures steadily easing, I think the trust’s a great one to consider this month.

The post Here’s a top investment trust to consider for dividends in June! appeared first on The Motley Fool UK.

None of us have a crystal ball to predict market movements in April. But with new trade tariffs set to begin merely hours from now, and worries over the geopolitical landscape also growing, traders and investors should be braced for more turbulence.

I don’t believe investors should head for the hills though. Here are two dividend shares to consider. I think they could still deliver great returns in the current climate.

The PRS REIT

Real estate investment trust The PRS REIT (LSE:PRSR) isn’t totally immune to the impact of import taxes. A trade war between the US and UK could fuel inflation which, consequently, means interest rates remain higher for longer.

But on balance, I think its focus on the residential rentals sector makes it attractive safe haven to consider. We all need a roof over our heads, so income streams remain resilient at all points of the economic cycle.

Indeed, PRS REIT collected 99% of the rents it was owed in the six months to December. Occupancy was also extremely high at 97% (including reserved homes).

The company’s focus on family homes — a market segment which is especially undersupplied — gives it added strength to grow earnings even in tough times. Rent hikes meant corresponding revenues rose £26.6m in the second half of 2024, up 16% year on year.

Government plans to supercharge UK housebuilding could temper future rent growth. But I’m optimistic they will continue rising at a strong rate, driven by the booming domestic population.

PRS REIT’s dividend yield is 3.7% for this financial year (to June), rising to 3.9% for fiscal 2026.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.

Primary Health Properties

Another REIT stock worth consideration in uncertain times is Primary Health Properties (LSE:PHP). Like PRS, it operates in an extremely stable industry, namely the development and letting of medical facilities.

What’s more, almost 90% of the rents it receives are guaranteed by government bodies like the NHS, providing earnings visibility with added strength. Rent collection and occupancy levels were both above 99% in 2024.

Robust demand for Primary Health’s modern properties also reflects severe market shortages across the UK and Ireland. In Britain, around a third of first-contact medical centres are designated unfit for purpose.

This chronic problem has seen dividends here rise for 28 straight years, including a 3% hike in 2024 to 3.9p per share.

There’s another good reason why both Primary Health and PRS REIT are reliable dividend payers. Under REIT rules, total dividends must represent at least 90% of annual rental profits each year.

Primary Health’s robustness could be compromised by changes to health policy. But I’m optimistic government strategy will remain favourable to the company, given the lower patient costs that primary care involves versus secondary care.

For 2025, Primary Health’s dividend yield is a large 7.4%.

The post 2 dividend shares to consider in what could be a bumpy April! appeared first on The Motley Fool UK.

I’m not saying that fresh trade tariffs, signs of resurgent inflation, and a weakening US economy are nothing to worry about. However, with some shrewd stock picks, UK share investors can limit the impact these hazards may have on their portfolios.

Here are two I think are worth considering today. I’m expecting them to deliver solid dividends regardless of these external factors.

The PRS REIT

We need to keep the rain off our heads regardless of the economic backdrop. This can make residential property stocks like The PRS REIT (LSE:PRSR) lifeboats for investors in tough times.

Rent collection at this FTSE 250 share has ranged between 98% and 100% in the last three years, even despite the twin problems of higher-than-normal inflation and a struggling domestic economy.

It’s worth noting that private rental growth in the UK is cooling sharply at the moment. Latest Zoopla data showed annual growth of 3% for new lets, down from 7.4% a year ago.

Further cooling is possible, although Britain’s rapidly growing population could put a floor under future declines. PRS REIT’s focus on the family homes sector, where accommodation shortages are especially sharp, might also support rental growth.

I’m certainly confident that the business will remain profitable enough to continue paying a large and growing dividend. Under real estate investment trust (REIT) rules, the company has to pay at least 90% of yearly rental earnings out to shareholders.

For this financial year (to June 2025), PRS REIT’s dividend yield is a market-beating 3.8%.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.

BAE Systems

The stable nature of arms spending makes defence stocks classic safe havens during tough times. With Europe proposing hikes to regional defence budgets, now could be an especially good time to consider buying shares like BAE Systems (LSE:BA.)

I like this particular firm because of its considerable financial resources and strong balance sheet, which add extra strength to dividend forecasts. This has underpinned steady payout growth dating back to the early 2010s.

Free cash flow remains considerable, and in 2024 remained stable at around £2.5bn. In my opinion, this gives BAE enough wiggle room to continue paying a growing dividend while also servicing its rising debt pile (net debt increased to £4.9bn last year following the acquisition of Ball Aerospace).

I think its terrific record of dividend growth makes it a great passive income stock to consider, even though recent share price strength has reduced its forward dividend yield to a modest 2.3%. This is some way below its 10-year average of around 4%.

On the downside, BAE Systems may face the prospect of cooling US sales as President Trump seeks to boost government efficiency. But on balance, I think the FTSE 100 stock still merits a close look from savvy dividend investors.

The post Are these 2 of the best dividend stocks to consider buying in these uncertain times? appeared first on The Motley Fool UK.

In exchange for breaks on corporation tax, these entities must pay 90% of profits from their rental operations out in the form of dividends. Many of these property investment trusts even regularly exceed this threshold.

There are other reasons why REITs can be a terrific source of long-term income, too. These include:

• Robust cash flows that can be paid straight out in dividends.
• Predictable rental income thanks to multi-year tenant contracts.
• Inflation-linked leases that protect against rising costs.
• The potential for dividend growth as rents rise and new properties are acquired.

Safe as houses?

With a focus on the highly stable residential lettings market, The PRS REIT (LSE:PRSR) can offer even greater income reliability to investors. In the last financial year (to June 2024), rent collection was 99%, while occupancy was a healthy 96%.

PRS REIT might be dependable but it’s by no means boring. Ripping rent growth across its portfolio of roughly 5,500 homes is sending earnings through the roof.

Revenue and adjusted profit were up 17% and 90% respectively in fiscal 2024. Results have been especially impressive because of the REIT’s focus on family homes, a segment where market shortages are especially acute.

A stream of industry data since then implies that trading conditions remain ultra supportive for the company. Office for National Statistics (ONS) data on Wednesday (19 February) showed UK private rents kept rising at a robust pace, up 8.7% in the 12 months to January.

Government plans to supercharge housebuilding between now and 2029 could impact future growth rates. But I believe rents may still rise sharply up to then (and potentially over the long term) as Britain’s population rapidly increases.

Investors can currently grab a market-beating 3.8% dividend yield with PRS REIT shares.

Big cheese

Profits at Tritax Big Box REIT (LSE:BBOX) are (in theory) more susceptible to economic downturns. But it’s another top investment trust that’s worth considering, in my opinion.

I actually currently hold this REIT in my own portfolio.

Tritax owns and lets out large warehouse and logistics assets across the UK. It therefore has considerable long-term growth potential as the e-commerce segment steadily grows.

But this is not all. Changes to supply chain management has boosted sector demand following the pandemic, and could continue if new trade tariffs come in that increase onshoring.

Tritax also has an opportunity to profit from rapid expansion in the data centre sector. Last month it acquired a 74-acre site near Heathrow Airport which it considers a “prime EMEA data centre location“.

As with the residential property segment, Tritax’s market is also grossly undersupplied and therefore experiencing significant rental growth. The business enjoyed annualised rental growth of 5.1% on reviewed leases during the six months to June, latest financials showed.

Tritax Big Box shares currently boast a healthy 5.6% dividend yield for 2025. I expect the company to remain a great dividend stock over the long term.

The post 2 hot REITS to consider for a long-term second income! appeared first on The Motley Fool UK.

Owning buy-to-let property gives investors a regular passive income, along with a way to exploit long-term house price growth. Yet there are also significant drawbacks, including high upfront costs, adverse tax changes, ongoing repair costs, and potential tenant problems.

There’s also the problem of ever-growing sector regulation. Just this week, the government unveiled new energy efficiency targets for landlords that could, on average, add between £6,100 and £6,800 to their costs by 2030.

Two top UK shares

I think a better way to consider tapping the residential rentals market is by buying UK stocks. Grainger (LSE:GRI) and The PRS REIT (LSE:PRSR) are a couple that allow individuals to profit from soaring tenant rents in a potentially simpler and more cost-effective way.

Grainger is the UK’s largest residential landlord currently listed on the London Stock Exchange. Its portfolio is worth a whopping £3.4bn and comprises some 11,100 homes.

PRS REIT is no small player, either. It had 5,437 properties on its books as of December.

Thanks to their strong balance sheets, both firms are expanding to capitalise on the lucrative trading environment too. Grainger’s £1.4bn development pipeline comprises a gigantic 5,000 homes.

Pros and cons

Both companies face the same problems of increased regulatory loopholes and associated costs. But they also enjoy significant economies of scale that private landlords don’t, which in turn limits the impact of such expenses on profits.

Other advantages these shares offer over buy-to-let include:

• Lower upfront investment costs for investors.
• No property management responsibilities.
• Superior risk mitigation through a diversfied portfolio of thousands of properties.
• UK shares can be sold more quickly and cost effectively than bricks-and-mortar assets.

One downside is that shareholders in these companies don’t have control over which properties to hold. Another is that they have some discretion over the levels of passive income they pay out.

Yet on balance, I believe the advantages they offer to investors outweigh the cons.

And in the case of PRS REIT, it only has limited control over dividend decisions. This is thanks to real estate investment trust (REIT) rules, which specify that at least 90% of rental income must be paid out each year.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.

Tonnes of choice

Another reason why I like the idea of UK stocks over buy-to-let is the range of options they provide. In other words, investors don’t just have to limit themselves to residential rentals and can seek large returns elsewhere.

It’s something I myself have sought to take advantage of. Primary Healthcare Properties and Tritax Big Box — companies which invest in medical and logistics facilities, respectively — are two I currently hold in my Stocks and Shares ISA.

In total, there are more than 50 REITs listed on the London Stock Exchange. I think potential buy-to-let landlords should give them a close look before investing any cash.

The post Thinking about buy-to-let? Consider these UK stocks instead appeared first on The Motley Fool UK.