Real Estate Investment Trusts (REITs)

REITs are similar to stocks but for the commercial real estate industry. They are trusts that buy commercial properties that produce income, such as apartments, office buildings, and shopping centers. When you buy shares of a REIT, you become a part owner in all of the property holdings of the REIT.

REITs are traded like stocks on the major stock exchanges, so they provide the liquidity of stocks with the diversification and income of commercial real estate. Most importantly for investors REITs must pay shareholder dividends of at least 90 percent of its taxable income. Whilst not for everyone REITs can be used to have a stake in the real estate market as part of a diversified portfolio.

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