A Real Estate Investment Trust (REIT) is a corporation that owns or finances income-producing real estate across a range of property sectors. They operate similarly to a mutual fund, allowing investors to pool their money for the opportunity to benefit from valuable real estate, through dividend-based income and total returns.
Some REITs buy properties and rent them to tenants or develop property from the ground up. Others don’t even own properties at all, only focusing on the mortgage and financial side of real estate.
Private REITs vs Public REITs
Most REITs you may be familiar with are exchange-traded REITs, but there are a lot of private ones that don’t trade on a public market.
Types of REITs
Retail - Approximately 24% of REIT investments are in shopping malls and freestanding retail.
Residential - These REITs typically own and operate rental apartments and manufactured housing.
Healthcare - This can include investing in hospitals, medical centres, nursing facilities and retirement homes.
Office - Receive rental income from tenants who have usually signed long-term leases.
Mortgage - Around 10% of REIT investments are in mortgages.