Wall Street has found a way to turn real estate into a publicly-traded instrument.
REITs are bought and sold on the major exchanges, just like any other stock.
A corporation must pay out 90% of its taxable profits in the form of dividends, to keep its status as an REIT.
By doing this, REITs avoid paying corporate income tax, whereas a regular company would be taxed its profits and then have to decide whether or not to distribute its after-tax profits as dividends.
Much like regular dividend-paying stocks, REITs are a solid investment for stock market investors that want regular income.
In comparison to the aforementioned types of real estate investment, REITs allow investors into non-residential investments such as malls or office buildings and are highly liquid.
In other words, you won't need a realtor to help you cash out your investment.