A REIT is a company that invests its stockholders’ money in real estate, often purchasing and operating a diversified portfolio of properties, including medical and healthcare facilities, retail shopping centers, and multi-family apartment and senior communities. The properties owned by the REIT may create rental income that is distributed to investors. REITs are required by law to pass at least 90% of taxable income to stockholders. REITs often create tax advantages and potential growth in appreciation for investors.
Publically Traded REITs
Traded REITs are bought and sold just like traditional exchange-traded stocks. While they can provide many of the benefits associated with direct real estate investing, traded REITs are subject to the same sort of market fluctuations as stocks.
Non-traded REITs are not publicly traded on a national stock exchange. They offer similar advantages as traded REITs, but non-traded REITs do not offer the liquidity of publicly traded REITs.
There is no assurance that the investment objectives of these programs will be attained or the investment will generate income to issue distributions. In some situations, distributions may be paid as a result of leveraging the portfolio or paid as a return of capital, which may pose additional risk to the principal amount of your investment. Read the applicable prospectus or offering memorandum carefully before you invest or send money.