A Real Estate Investment Trust (REIT) is any corporation, trust or association that acts as an investment agent specializing in portfolios of real estate. REITs can be publically or privately held, and public REITs can be listed on public stock exchanges.
REITs permit those interested in investing in income-generating real estate, often commercial real estate, to do so – even if the concept is out of their financial reach. Resources are pooled together with other small investors and permit individuals to increase their net worth, without having to individually take on a major investment. Sometimes REITs are referred to as “real estate stock.”
Additionally, REITs offer the benefits of real estate ownership without the headaches of being a landlord, and limit financial risk because the individual invests in a portfolio of properties versus a single building.