What are some ways to invest in real estate investment trusts?


Quick Answer

Investors can purchase shares of a publicly traded real estate investment trust listed on a major stock exchange through a licensed broker, explains Investor.gov. Investors may also purchase shares of private real estate investment trusts through brokers that offer nonpublic REITs.

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Full Answer

Publicly traded REITs usually offer shares of preferred stock, common stock or debt security instruments available for purchase on major stock exchanges, according to Investor.gov. When investors purchase shares of a REIT, it allows them to invest in large-scale, income-producing real estate without actually purchasing shopping malls, office buildings or multifamily properties. Real estate investment trusts do not develop and build real estate to resell for a profit; however, they buy and develop real estate as part of an investment portfolio to generate income.

Real estate investment trusts involve risks, typically with non-exchange traded REITs, states Investor.gov. Since private REITs do not trade on the open market, they are not as liquid as publicly traded REITs. If investors need to sell shares of their private REITs to generate fast capital, there may not be as many buyers as on the open market. Shares of non-exchange traded REITs are not as transparent as publicly traded REITs. Privately held REITs can keep their per share price quiet, while publicly traded REITs must disclose their per share price.

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