According to Investopedia ;”Definition of ‘Real Estate Investment Trust – REIT’ A security that sells like a stock on the major exchanges and invests in real estate directly, either through properties or mortgages. REITs receive special tax considerations and typically offer investors high yields, as well as a highly liquid method of investing in real estate.
Equity REITs: Equity REITs invest in and own properties (thus responsible for the equity or value of their real estate assets). Their revenues come principally from their properties’ rents.
Mortgage REITs: Mortgage REITs deal in investment and ownership of property mortgages. These REITs loan money for mortgages to owners of real estate, or purchase existing mortgages or mortgage-backed securities. Their revenues are generated primarily by the interest that they earn on the mortgage loans.
Hybrid REITs: Hybrid REITs combine the investment strategies of equity REITs and mortgage REITs by investing in both properties and mortgages.”
I am very cautious when it comes to REIT’s. They offer a great way to assure dividend earnings on your holdings which you can use to reinvest. The ones I followed are the following:
SPDR DJ GLOBAL REAL ESTATE (RWO)
What I love: It has global exposure; which means that reward is greater. It has the morning star rating of five-star. There is a dividend of $0.70 (Money it pays investors).
REVENUESHARES LARGE CAP ETF (RWL)
What I love: It has a morning star rating of four stars.There is a dividend of $0.17 (Money it pays investors).
ISHARES FTSE NAREIT RES PL CAP (REZ)
What I love: It has a morning star rating of five-star. There is a dividend of $0.37 (Money it Pays investors)