REITs are a means by which an investor can invest into real estate without directly owning the property. A REIT is a company that accepts investors funds and, purchases properties owned by the REIT. In most cases the REIT operates the income-producing property owned by the REIT….therefore, taking on the responsibility of the investment vs. the individual investor owning the property.
A REIT will typically own commercial real estate, which can run the gamut of strip malls, hospitals, office complexes, hotels, commercial real estate and more. REITs may also even finance commercial real estate transactions.
REITs can be privately held or publicly traded…even on stock exchanges. The intent is to treat the investment as one might invest into a mutual fund.
REITs may be held in either an equity or mortgage position…or, even a combination of both.