SCHH REIT Calculator

What SCHH actually is

SCHH is the Schwab U.S. REIT ETF: a single fund that holds a diversified basket of U.S. equity real-estate investment trusts, tracking the Dow Jones Equity All REIT Capped Index. The word "equity" matters — the index deliberately excludes mortgage REITs, the leverage-heavy trusts that own loans rather than buildings, so what you get is exposure to the landlords: data centers, towers, industrial warehouses, retail, apartments and healthcare property owners, capped so no single name dominates. It charges a 0.07% expense ratio and runs roughly $10 billion in assets, which makes it one of the lowest-cost, most-traded ways to own the REIT sector in one line. That structure is the whole reason this calculator is its own page: SCHH behaves like a diversified real-estate income fund, not like any one company.

Who tends to reach for it

SCHH appears most in portfolios that want a dedicated real-estate sleeve without picking individual REITs. A broad index fund like VOO already holds some real estate, but at a low weight; investors who believe property income and its inflation linkage deserve a larger allocation use a fund like SCHH to top it up in one purchase. The contrast with a single-name REIT such as Realty Income (O) is the useful one: O pays a higher headline yield monthly from one net-lease business, while SCHH spreads a lower ~2.8% yield across dozens of property types quarterly, trading some current income for diversification. And unlike SCHD's growing qualified dividend, SCHH's payout is REIT income — taxed harder and growing more slowly. None of these is "better"; they answer different questions, which is why each has its own projection here.

How DRIP compounds here

With the DRIP toggle on, each quarterly distribution buys more SCHH shares, and those shares pay their own distribution next quarter — the reinvestment loop the toggle turns on and off. Because SCHH starts near a 2.8% yield rather than a high-single-digit one, the income line builds from a lower base than a covered-call or single-REIT fund, and it drifts upward slowly since REIT payouts have grown only modestly through the rate cycle. The 0.07% expense ratio is a small but real drag the projection subtracts from price growth every year. Turn DRIP off and you take the cash instead; the share count stops compounding and the income line flattens sooner. The chart shows both as a band, not a line, because REIT dividend and price growth over a multi-decade hold is genuinely uncertain — especially given how sensitive property values are to interest rates.

The tax detail worth knowing

This is the part that most changes the after-tax number. Because a REIT passes through income without paying corporate tax, most of SCHH's distribution is non-qualified — taxed as ordinary income at your marginal rate, not the lower 0/15/20% rate that applies to SCHD's qualified dividends. A §199A deduction shelters part of the eligible ordinary slice, and a portion arrives as return of capital, which defers tax by lowering your basis rather than erasing it. The base case, though, is that SCHH's income is taxed harder than a qualified-dividend fund at the same yield — which is exactly why REIT funds are so often held inside a Roth or traditional IRA. The Account toggle above models this directly: the default taxable projection taxes the distribution as ordinary income, applies the §199A deduction on the eligible slice and defers the return-of-capital portion before the DRIP reinvests, while a Traditional IRA or Roth compounds the same paths untaxed. Switch it to see what the account choice is worth at your bracket.