REITs, or Real Estate Investment Trusts, are investment vehicles that allow individuals to invest in income-producing real estate properties without having to buy, manage, or finance the properties themselves.

REITs are traded on stock exchanges, similar to stocks and ETFs. This provides investors with liquidity, as they can buy and sell REIT shares easily during trading hours.

REITs are structured as companies or trusts that own, operate, or finance income-generating real estate across various sectors, including commercial, residential, industrial, and healthcare properties. They offer a way for investors to gain exposure to real estate markets and potentially earn regular income and capital appreciation.

In other words, when you buy a REIT, you’re investing in a company or trust that owns and manages real estate (different properties in many sectors). The Company rents these buildings to retail, pharmacies, hospitals, people, and so on. And the collection of the rent from the properties they own is typically shared and distributed to shareholders in the form of dividends.

REITs are like a way for regular people to invest in real estate without the headaches of being a landlord or buying a whole property. Plus, they often pay out good dividends, which can be like getting rent from the real estate you “own” together with other investors.

REITs are managed by professional management teams responsible for acquiring, leasing, and managing the properties. This allows individual investors to passively invest in real estate without the hands-on responsibilities of property ownership.

Most REITs are very cheap, even less than $100 per share.

There are many types of REITs, a popular one is Realty Income Corporation, commonly referred to as Realty Income, which is one of the most well-known and widely followed Real Estate Investment Trusts (REITs) in the United States. It specializes in investing in commercial real estate properties and is often called “The Monthly Dividend Company” because it pays dividends to its shareholders on a monthly basis (Doesn’t mean I invest in this one).

To invest in REITs, you need to open a brokerage account. When selecting a brokerage firm, consider factors like fees, account types, available investment options, trading tools, and customer support.

Now that you know about REITs, when you get to research and think about which REIT to buy, think about the goal you want to reach and how much passive income you want to receive every month/quarterly to achieve that goal.

For instance: Is it $200 or $400 that you want to receive per month/quarterly in dividends?

When you determine that, choose a REIT that has the dividends that will allow you to get that amount. Also, you have to calculate how many shares you need to buy (own) to get that monthly/quarterly passive income.

REITs Classifications:

• Publicly Traded REITs: These REITs are listed on major stock exchanges, and investors can buy or sell shares just like any other publicly traded company.
• Public Non-Traded REITs: These REITs are registered with the Securities and Exchange Commission (SEC) but don’t trade on public exchanges. They offer diversification but tend to have lower liquidity than publicly traded REITs. I do not recommend these due to the Lack of Liquidity.
• Private REITs: Not registered with the SEC and not publicly traded. These are typically available only to accredited investors, offering less liquidity and transparency.

REITs dividends historically have provided:

• Wealth Accumulation
• Reliable Income Returns
• Reduced Portfolio Volatility
• Inflation Protection

If you want to know the Pros and Cons, Market Risk and more Types of REITs, I talk more in detail about it in my investment course.