A REIT, or a real estate investment trust, is a company that owns, operates or finances income-producing real estate. This is often done by pooling investors’ money to buy and possibly manage commercial or residential buildings. The company then collects rent from its tenants and passes that income onto investors in the form of strong dividends.

REITs are essentially just big landlords, says John LaForge, head of real asset strategy for Wells Fargo Investment Institute in Sarasota, Florida. “They’re a company that has professional money managers who understand real estate,” buying and managing it for investors.

As REIT shareholders, investors get exposure to real estate without the headaches of owning, operating or directly financing properties. Read More