REITs — Real Estate Investing Without Being a Landlord
A REIT (Real Estate Investment Trust) is a company that owns income-producing real estate. You buy shares like stocks and receive dividend income.
REIT vs Physical Property
| Feature | REIT | Physical Property |
|---|---|---|
| Minimum Investment | $100 (1 share) | $40,000+ (down payment) |
| Liquidity | Sell anytime | Months to sell |
| Management | None (passive) | Active or hire manager |
| Diversification | Hundreds of properties | 1-2 properties |
| Avg Dividend Yield | 3-6% | Varies |
Types of REITs
Residential (apartments), commercial (offices), retail (malls), healthcare (hospitals), industrial (warehouses), data centers, cell towers. Each has different risk and return profiles.
REITs must distribute 90% of taxable income as dividends, making them excellent for income investors.