What is a REIT?
Real estate—the holy grail of investing for the masses, and often the largest asset purchase made in lifetimes! But does it have to be? And is there a way to invest in real estate without a significant downpayment?
That's where a Real Estate Investment Trust (REIT) comes in. Thanks to REITs, liquidity has massively improved in the sector, and smaller players can get in with the click of a "buy" button.
A REIT is an independent investment company that purchases real estate for the sole purpose of generating regular, predictable current income. REIT portfolios typically consist of commercial properties such as corporate offices, warehouses, shopping malls, and apartment complexes.
Simply put, REITs are similar to mutual funds, only the focus is on purchasing income-generating real estate versus traditional stocks and bonds.
This quiz will cover various aspects of REITs to help you better understand the pros and cons.