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Real Estate Investment Trust. A way to invest in real estate without buying property.
Why It Matters
REITs let you invest in real estate - office buildings, apartments, malls, data centers - without becoming a landlord. By law, they must pay out 90% of taxable income as dividends, so yields are often 4-8%. You get real estate diversification in your portfolio without dealing with tenants, repairs, or property management.
Key Points
- Types: Equity REITs own properties; Mortgage REITs lend money to property owners
- Popular REITs: Realty Income (O), Prologis (warehouses), Digital Realty (data centers)
- REIT dividends are taxed as ordinary income, so consider holding them in tax-advantaged accounts
Related Terms
Common Questions
Real Estate Investment Trust. A way to invest in real estate without buying property. REITs let you invest in real estate - office buildings, apartments, malls, data centers - without becoming a landlord. By law, they must pay out 90% of taxable income as dividends, so yields are often 4-8%.
REITs let you invest in real estate - office buildings, apartments, malls, data centers - without becoming a landlord. By law, they must pay out 90% of taxable income as dividends, so yields are often 4-8%. You get real estate diversification in your portfolio without dealing with tenants, repairs, or property management.
Types: Equity REITs own properties; Mortgage REITs lend money to property owners
Popular REITs: Realty Income (O), Prologis (warehouses), Digital Realty (data centers)
REIT dividends are taxed as ordinary income, so consider holding them in tax-advantaged accounts