Decision criteria for investing in REIT?

[Carpediem]

We are currently invested in Wellington and Wellesley (approx $800k) with an asset mix of 60/40 (tIRA). We have an additional $400k invested outside of VG. I am looking to retire in one year, two at the max....depends on the healthcare outcome. Our sources of income in retirement will be: our investments, rentals, and social security. (No pension)

Obviously dividends are an important part of our plan. I don't want to go chasing dividends at the risk of screwing things up but I'm wondering if I should change my AA to include VG's REIT. I realize it's currently down a bit but its dividend yield history is still good I believe and I'd love to increase our future dividend earnings.

So I'm wondering if you were in my situation, would you invest part of the $800k in VG's REIT? If so, what would a reasonable amount/pct be? And if I do decide to invest in it, is there a best time of the month/quarter to do so? (I seem to recall reading something about avoiding "buying the dividend".)

Overall, I'm hoping to learn what the decision criteria should be for investing in a REIT. I'm obviously a noob so I'm looking to learn more as part of my ongoing investment education.

Thank you.

Edit to add: Our ages are 58/57 so all dividends are currently reinvested.

 

[exnavynuke]

I put all real estate into the same category and identify it as one asset sector (whether it's a physical residence I own or investments in real estate through funds). I also am a big fan of diversification so I try not to put more than 15% of my portfolio in one asset sector. As such, I generally find that my residence alone satisfies my desire for exposure to the real estate market and only have residuals invested elsewhere (~2% across my current funds) since I already have a significant portion of my net worth tied up in real estate I own directly.

 

[target2019]

We have 5% of total portfolio in Vanguard REIT. We also have REIT presence in other funds. Overall we might be 10%. Need to measure things closer.

 

[Carpediem]

We have 5% of total portfolio in Vanguard REIT. We also have REIT presence in other funds. Overall we might be 10%. Need to measure things closer.

Have you been pleased / satisfied with the dividend payouts from the VG REIT?

 

[RetiredGypsy]

I just looked here at Vanguard, where you can scroll down and see Real Estate percentage from the Vanguard site. Apparently VTSAX has 3.76% in real estate. VFIAX has 2.28%. I just did the math, and it's putting me close to 13% overall in real estate. I can live with that.

I'm still happy keeping 10% in VGSLX. Vanguard has shown my rate of return for the last decade at 11% with everything reinvested. Less than the 19.5% and 13.6% returns on my other largest holdings, more than the 7.7% of Wellesley. My performance page on Vanguard is showing that Wellesley has given twice as much in income returns, to the tune of 20% now of the overall amount I have in there. VGSLX shows income returns right now after that same decade at 10% of the overall amount.

The link makes comparing funds easy. I'm very happy having both in my portfolio.

 

[target2019]

Have you been pleased / satisfied with the dividend payouts from the VG REIT?

This is in my Roth, and divs are reinvested. Those divs are not qualified, either.

I don't watch the dividend rate. But I'm very satisfied with the overall growth. It is well diversified.

 

[audreyh1]

5% of my equity allocation is invested in REITs. It seems to behave quite differently than my other equity classes - marching to its own drummer as it were - so I find it a useful diversifier for rebalancing purposes.