A Real Estate Investment Trust (REIT) is a company that owns, operates, or finances income-producing real estate across various property sectors. REITs allow individual investors to earn dividends from real estate investments without having to buy, manage, or finance properties themselves.
REITs typically invest in commercial properties such as office buildings, shopping malls, apartments, hotels, and warehouses. They are required by law to distribute at least 90% of their taxable income to shareholders as dividends, making them attractive for income-seeking investors.
For example, if you invest in a REIT that owns shopping malls, you earn a portion of the rental income generated by those malls. REITs trade on major stock exchanges, providing liquidity and transparency. They offer a way to diversify your portfolio with real estate exposure without the complexities of direct property ownership.