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REIT
(Real Estate Investment Trust)
A REIT (Real Estate Investment Trust) is a company that owns/operates income-producing real estate, required by law to distribute 90% of taxable income as dividends. There are ~225 publicly traded U.S. REITs with $1.2 trillion market cap.
REITs provide liquid real estate exposure without property management. Types include equity (apartments, malls), mortgage (real estate loans), and hybrid. Average dividend yields are 3-5%, higher than S&P500's 1.5%. REITs outperformed stocks over 25 years (11.4% vs 10.3% annualized). Specialized REITs now exist for data centers, cell towers, and even timberland. Unlike LLCs, REITs avoid corporate tax but have strict ownership and asset tests.
REITs provide liquid real estate exposure without property management. Types include equity (apartments, malls), mortgage (real estate loans), and hybrid. Average dividend yields are 3-5%, higher than S&P500's 1.5%. REITs outperformed stocks over 25 years (11.4% vs 10.3% annualized). Specialized REITs now exist for data centers, cell towers, and even timberland. Unlike LLCs, REITs avoid corporate tax but have strict ownership and asset tests.