Real Estate
REIT (Real Estate Investment Trust)
A company that owns or finances income-producing real estate, allowing investors to gain real estate exposure without owning property directly.
Example
Buying shares in a REIT that owns a portfolio of shopping centers lets you collect a share of the rental income and property appreciation without buying, financing, or managing a building yourself.
Common Misconception
REITs aren't the same as directly owning rental property — REIT share prices can be volatile like stocks, and REIT distributions are often taxed as ordinary income rather than at the lower qualified-dividend rate.
Why It Matters
REITs are one of the more accessible ways to add real estate exposure to a portfolio without the capital and hassle of buying physical property directly.