What Is a Real Estate Investment Trust (REIT)?

A real estate investment trust (REIT) is a company that owns, operates, or finances income-generating real estate. Modeled after mutual funds, REITs pool the capital of numerous investors.

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1. A real estate investment trust (REIT) is a company that owns, operates, or finances income-producing properties.
2. REITs generate a steady income stream for investors but offer little in the way of capital appreciation.
3. Most REITs are publicly traded like stocks, which makes them highly liquid (unlike physical real estate investments).
4. REITs invest in most real estate property types, including apartment buildings, cell towers, data centers, hotels, medical facilities, offices, retail centers, and warehouses.
5. Pros
- Liquidity

- Diversification

- Transparency

- Stable cash flow through dividends

- Attractive risk-adjusted returns
6. Cons
- Low growth

- Dividends are taxed as regular income

- Subject to market risk

- Potential for high management and transaction fees
Do you have REITs in your portfolio?
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