REITs hold commercial properties or real estate loans, letting retail investors access income-producing real estate portfolios.
REITs lease space or earn loan interest, and must pay ≥90% of taxable net income as dividends.
REIT types include equity, mortgage, and hybrid, spanning sectors like office, industrial, retail, residential, healthcare, and data centers.
Benefits include higher dividend yields, liquidity, diversification, transparency, and no federal corporate income tax for REITs.
Drawbacks include nonqualified dividend taxes, interest-rate sensitivity, property risks, and potential overuse of debt.
I’m seeing more investors use REITs to get real estate exposure without buying properties directly. The focus is on dividends, diversification, and liquidity, while staying mindful of taxes, rates, and property-specific risks.

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