These investments let you own real estate without having to be a landlord.
What is a REIT? A real estate investment trust (REIT) is a real estate investment company that manages a portfolio of income properties, distributing the lion’s share of its profits as dividends. By getting into a REIT, you can gain an ownership interest in prime commercial real estate, without the headaches of commercial real estate management.
How do REITs work? On one level, a REIT is an agreement with the Internal Revenue Service. In choosing a REIT structure, a real estate investment company agrees to pay out 90% or more of its taxable profits in dividends in exchange for avoiding corporate income tax.1