What is a REIT?

green-door

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 major stock exchanges, but some are not publicly listed and are considered “private” REITs. The two main types of REITs are equity REITs and mortgage REITs. 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.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s