Investing term
What is REIT?
A Real Estate Investment Trust — a company that owns income-producing real estate and trades on a stock exchange.
A REIT (Real Estate Investment Trust) is a company that owns income-producing real estate — offices, apartments, warehouses, shops — and trades on a stock exchange like any other stock. It lets you invest in property and collect a share of the rental income without buying, financing, or managing buildings yourself.
REITs are typically required to pass most of their taxable income to shareholders as dividends, which is why they tend to be higher-yielding than the average stock. That makes them a popular income holding and a way to add real-estate exposure to a portfolio in a liquid, diversified form — you can buy or sell a REIT in seconds, unlike an actual building.
A REIT owns income-producing property and passes most of the rent to shareholders as dividends. You get diversified real-estate income in a liquid share — but it swings like a stock.
For example
Buy shares in a REIT and you own a slice of hundreds of properties, collecting a dividend funded by their rents — landlording without the tenants.
Learn it by doing
That's REIT in theory — it clicks when you use it. Practise it hands-on in a free, interactive lesson (Stage 4, Stocks, Bonds, Cash & Alternatives).
Try the free lesson →Why it matters to you
REITs matter because they solve the biggest problems with owning property directly: the huge cost, the illiquidity, and the hassle of being a landlord. Through a single liquid share you get diversified exposure to real estate and a steady income stream. They also behave somewhat differently from the broad stock market at times, adding a modest diversification benefit — though as listed shares, they still swing with markets more than physical property does.
⚠ Expecting REITs to be as steady as property
Because REITs trade as shares, their prices swing with the stock market and interest rates, often more than the underlying buildings' values do — they can fall sharply in a market panic even if rents hold up. A REIT gives you real-estate income in liquid form, but it behaves like a volatile stock, not like a stable, slow-moving property.