Is a REIT a good investment?

“A REIT is a fund that buys real estate for investors,” says Lee Harbaugh, a real estate agent in Mansfield, Texas. “It’s a passive way to get real estate exposure where you don’t have to worry about buying or selling properties yourself.” REITs first emerged in the 1960s and now have more than $4 trillion in assets.

How do you invest in a REIT?

This is a big draw for investor interest in REITs. Invest at least 75% of total assets in real estate or cash. Receive at least 75% of gross income from real estate, such as real property rents, interest on mortgages financing the real property or from sales of real estate. Have a minimum of 100 shareholders after the first year of existence.

How do REITs invest in commercial real estate?

REITs own and/or manage income-producing commercial real estate, whether it's the properties themselves or the mortgages on those properties. Where REIT investing is concerned, you can invest in the companies individually, through an exchange-traded fund, through real estate crowdfunding, or with a mutual fund.