Want real estate exposure without the headache of being a landlord? Real Estate Investment Trusts (REITs) offer a simple, liquid way to invest in income‑producing properties.
A Real Estate Investment Trust (REIT) is a company that owns, operates, or finances income‑producing real estate. Think of it as a mutual fund for real estate. By law, REITs must distribute at least 90% of their taxable income to shareholders as dividends, making them popular among income‑focused investors.
Own and operate physical properties (apartments, offices, malls, warehouses). Generate income primarily through rent. Most common type.
Lend money to real estate owners or invest in mortgage‑backed securities. Earn income from interest. More sensitive to interest rate changes.
Combine the strategies of equity and mortgage REITs – own properties and hold mortgages. Offer diversification within a single REIT.
Publicly Traded REITs: Buy shares on major stock exchanges like any stock. High liquidity, transparent pricing, but subject to market volatility.
Public Non‑Traded REITs: Registered with SEC but not listed on exchanges. Less liquid, higher fees, but may offer higher yields.
Private REITs: Sold only to accredited investors. Illiquid, often higher risk/reward.
REIT ETFs & Mutual Funds: Instant diversification across many REITs. Low cost, easy to buy.
See how different REIT types might perform based on your investment amount and time horizon.
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This simulator uses historical average yields and growth rates. Actual returns vary. REIT dividends are taxed as ordinary income (unless in a tax‑advantaged account). Always research specific REITs before investing.