What is a key feature of a REIT (Real Estate Investment Trust)?

A key feature of a Real Estate Investment Trust (REIT) is that it is a company that primarily owns, operates, or finances income-producing real estate. This structure allows individual investors to earn a share of the income produced through commercial real estate ownership without having to buy, manage, or finance any properties themselves. REITs are designed to provide investors with a way to invest in real estate while benefiting from the advantages of a corporation, such as liquidity, diversification, and professional management.

In order to qualify as a REIT, a company must adhere to specific regulatory requirements, such as paying out at least 90% of its taxable income to shareholders in the form of dividends. This focus on income-producing properties makes REITs an appealing option for investors seeking income through dividends as well as potential appreciation in property values over time.