American real estate investment trusts (REITs) represent one of the most accessible ways to invest in the US real estate market. For Brazilians residing in the country, this modality offers the opportunity to diversify their portfolio with assets that distribute regular dividends and have long-term appreciation potential.
Unlike Brazilian FIIs, REITs are publicly traded companies that own, manage, or finance income-generating properties. This corporate structure allows for greater operational flexibility and access to different segments of the American real estate market, from shopping malls to specialized data centers.
What are REITs and how do they work for Brazilians in the US?
REITs operate as publicly traded companies that invest in real estate assets or real estate-backed securities. By law, these companies must distribute at least 90% of their taxable profits to shareholders in the form of dividends, making them a consistent source of passive income.
For Brazilians residing in the United States, REITs offer specific advantages, such as exposure to the local real estate market without the need to purchase physical properties. Furthermore, these investments are more liquid than direct real estate investments, allowing for more flexible entry and exit options.
REITs can be divided into three main categories: Equity REITs (invest in physical properties), Mortgage REITs (finance real estate developments), and Hybrid REITs (combine both strategies). Each type offers different risk and return profiles, suiting various investment objectives.
Main differences between American REITs and Brazilian FIIs
The first fundamental difference lies in the legal structure: while REITs are funds managed by administrators, REITs are companies with their own board of directors and autonomy for strategic decisions. This characteristic allows REITs to use financial leverage more flexibly and geographically diversify their investments.
In terms of taxation, there is a significant difference for Brazilians. FIIs in Brazil are exempt from dividend tax, while REITs are subject to a 30% withholding tax for foreign investors. However, due to the reciprocity agreement between Brazil and the US, there is no double taxation on these income.
Distribution frequency also varies: Brazilian FIIs generally pay monthly dividends, while most REITs distribute dividends quarterly. Furthermore, the American market offers greater sector diversity, including segments such as data centers, telecommunications towers, and even casinos—sectors that are nonexistent or limited in the Brazilian market.
Best REIT sectors to invest in 2026
Data Centers – The expanding sector
Data center REITs are among the most promising companies today, driven by the growing demand for cloud services and artificial intelligence. Companies like Digital Realty Trust (DLR) and American Tower Corporation (AMT) lead this segment, offering sustainable growth and consistent dividends.
This sector benefits from long-term contracts with major technology companies, providing revenue stability even in adverse economic scenarios. The expansion of the digital economy makes these assets strategic and potentially worth more than the market average.
Shopping Centers and Retail
The shopping center sector has undergone significant post-pandemic transformations, but REITs focused on essential retail and suburban centers are showing a solid recovery. Simon Property Group (SPG), the largest REIT in the sector, offers an attractive dividend yield of approximately 7% and has a consistent payment history.
The best investments in this segment are concentrated in properties with established anchor stores like Target, Whole Foods, or Walmart, located in regions experiencing demographic growth. These developments tend to be more resilient to changes in consumer behavior.
Logistics Warehouses
The growth of e-commerce has solidified logistics warehouses as key assets in the distribution chain. Prologis (PLD), a global leader in this segment, maintains occupancy rates above 95% and consistent organic rental growth.
These REITs benefit from strategic locations near major urban centers and the growing demand for efficient storage space. The scarcity of well-located land creates a natural barrier to entry, protecting existing investments.
Healthcare Sector
Healthcare REITs invest in hospitals, specialized clinics, and senior care facilities. With the aging of the American population, this sector is experiencing growing structural demand. Omega Healthcare Investors (OHI) and Medical Properties Trust (MPW) are representative examples of this category.
These investments offer long-term contracts with established healthcare providers, providing predictable cash flow. The sector also benefits from regulations that favor the expansion of specialized healthcare services.
REITs with the best dividend yield for passive income
For Brazilians seeking consistent passive income, some REITs stand out for their track record of regular distributions and attractive yields. It's important to balance dividend yield with the sustainability of payments and the quality of the underlying assets.
Realty Income Corporation (O), known as "The Monthly Dividend Company," has been distributing monthly dividends for over 50 consecutive years. With a yield of around 5-6%, it offers geographic and sector diversification in essential retail properties.
Enterprise Products Partners (EPD), although technically an MLP (Master Limited Partnership), operates similarly to REITs in the energy infrastructure sector. It offers high yields, often above 8%, with consistent quarterly distributions.
WP Carey (WPC) specializes in net-lease properties with long-term contracts, offering yields close to 6% with gradual dividend growth. The company maintains international geographic diversification, reducing its concentration in the US market.
How to invest in REITs as a Brazilian in the US
Opening an account with American brokerage firms
The first step is to open an account with a brokerage firm that serves Brazilians residing in the US. Popular options include Charles Schwab, Fidelity, TD Ameritrade, and E*TRADE, all of which offer full access to REITs listed on US exchanges.
These brokerages typically waive brokerage fees for stock and REIT trading, making investing more accessible. It's important to review account opening requirements and maintain up-to-date U.S. residency documentation.
Diversification Strategies
Diversification is key when investing in REITs, considering different sectors, geographic regions, and property types. An effective strategy includes allocating 10-20% of the portfolio to REITs, splitting them between equity REITs (70%), mortgage REITs (20%), and hybrid REITs (10%).
For beginning investors, REIT ETFs like Vanguard Real Estate ETF (VNQ) or iShares Core US REIT ETF (USRT) offer instant diversification with low management fees. These funds include dozens of REITs from different sectors, reducing the risk specific to individual companies.
Monitoring and rebalancing
Regular monitoring of REIT performance is essential, focusing on metrics such as Funds From Operations (FFO), Net Asset Value (NAV), and dividend coverage ratio. These metrics provide insights into the financial health and sustainability of dividends.
Semiannual or annual rebalancing helps maintain the desired strategic allocation by selling overvalued positions and buying assets with recovery potential. This discipline is crucial for maximizing long-term returns.
Tax aspects for Brazilians residing in the USA
Taxation in the United States
As a US tax resident, REIT dividends are taxed as ordinary income at the applicable federal and state marginal rates. Unlike qualified stock dividends, REITs do not receive preferential tax treatment and are taxed at full tax rates.
The sale of REITs at a gain is subject to capital gains tax, with preferential rates for investments held for more than one year (long-term capital gains). For short-term positions, gains are taxed as ordinary income.
Efficient tax planning
Strategies like tax-loss harvesting can be useful for optimizing tax burdens by selling positions at a loss to offset realized gains. Holding REITs in tax-advantaged accounts like 401(k)s or IRAs can defer or eliminate taxation on dividends.
For Brazilians who maintain ties with Brazil, it is important to consider tax obligations in both countries and seek professional guidance to avoid double taxation or compliance issues.
Risks and important considerations
Interest rate sensitivity
REITs are particularly sensitive to changes in interest rates, as they rely on financing for acquisitions and expansions. Periods of rising interest rates tend to negatively pressure the prices of these assets, while rate cuts benefit performance.
Interest rate risk particularly affects mortgage REITs, which depend on the spread between borrowing and investment rates. Equity REITs are less sensitive but can still be impacted by competition from fixed-income investments.
Sector-specific risks
Each REIT sector presents unique risks: shopping malls face the digitalization of retail, offices deal with remote work, and healthcare REITs depend on government policies. Diversification across sectors mitigates these specific risks.
Mortgage REITs present greater volatility and credit risk, especially in economic stress scenarios. These investments require more careful analysis and represent a smaller portion of a diversified portfolio.
Future outlook for the REIT market
The US REIT market continues to evolve with demographic and technological trends. A growing elderly population benefits healthcare and senior housing REITs, while digitalization boosts data centers and logistics.
Sustainability has become a differentiating factor, with REITs investing in environmental certifications and energy efficiency. Sustainable properties tend to attract premium tenants and command higher rents, creating a lasting competitive advantage.
Innovations like PropTech (real estate technology) are transforming property management, improving operational efficiency and the tenant experience. REITs that embrace these technologies tend to outperform in the long term.
Conclusion
REITs represent a valuable opportunity for Brazilians residing in the United States to diversify their investments in the American real estate market. With attractive dividend yields and appreciation potential, these assets can comprise a significant portion of a balanced portfolio.
Successful REIT investing requires careful research, adequate diversification, and a long-term perspective. Considering tax considerations and maintaining discipline when rebalancing are essential to maximizing returns on these investments.
For Brazilians seeking passive income and exposure to the robust American real estate market, REITs offer an affordable and liquid solution, combining the advantages of real estate investment with the convenience of the capital markets.
