REIT (Real Estate Investment Trust)

REIT is an investment trust that buys, owns, and manages a portfolio of real estate for its shareholders. REITs are similar to mutual funds, only with real estate instead of stocks. REITs come in all types and sizes; with the primary attraction of providing diversification which gives you the economic benefits of owning real estate but with lower volatility and risk. They aim to provide stable and predictable cash flow with the possibility of long-term appreciation. REITs are generally held for 7-10 years and provide an average of 5-7% cash flow. Another attraction to REITs is their low minimums, as low as $1,000, and they often do not require investors to be accredited. REITs provide an opportunity to invest in real estate inside retirement accounts such as pension plans and IRAs.