REIT Dividend Income Calculator
Estimate the dividend income a REIT investment throws off, before and after tax, and how a growing payout lifts your yield on cost over time.
How it works
Year-1 income = amount × yield · Year-n income = year-1 × (1 + growth)ⁿ⁻¹ · Yield on cost = year-n income ÷ amount
A REIT must distribute most of its taxable income, so it typically carries a higher dividend yield than an average stock. The starting income is simply your stake times the yield, but if the REIT grows its payout each year, the income measured against your original cost — your yield on cost — climbs even if the share price does nothing. Note that REIT dividends are usually taxed as ordinary income rather than at the lower qualified-dividend rate, which is why the after-tax figure matters.
Worked example
Invest $50,000 at a 5% yield: year-1 income is $2,500, about $208 a month, or $1,950 after a 22% tax. If the payout grows 3% a year, by year 10 the dividend is about $3,262 — a 6.5% yield on your original $50,000 even though your cost never changed.
Frequently asked questions
Why are REIT dividends taxed differently?
Because REITs pass through income that was never taxed at the company level, most of their dividends are ordinary income to you, not qualified dividends. A portion may be return of capital or qualify for the pass-through deduction, so your actual rate can vary.
What is yield on cost?
It is the current annual dividend divided by what you originally paid, not by today’s price. As a company raises its dividend over the years, your yield on cost rises even though the market yield stays roughly flat.
Does this include share-price changes?
No. This tool isolates the income stream. Total return also depends on whether the REIT’s share price rises or falls — use the total-return calculator to combine both.
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Educational estimate, not investment advice. Markets involve risk of loss and future returns are never guaranteed.