A REIT (real estate investment trust) is a company that owns or finances income-producing real estate, including retail, office, multifamily and residential structures. Similar to mutual funds, REITs provide varied investors constant income streams through diversification and long-term capital gains. REITs typically pay out 90 percent of their taxable income as dividends to shareholders.
Most REITs are traded on, but some are and are considered “ ” REITs. The two main types of REITs are and . Equity REITs generate income through rent collection and from the sales of properties. Mortgage REITs invest in mortgage securities tied to commercial and/or residential properties.
Currently, REITs exist in many aspects of the economy, including seniors housing, medical, hospitality, industrial and student housing to name a few. REIT-owned properties are now located in every state and create approximately one million U.S. jobs annually.