What Are REITs and How do They Work?
Real Estate Investment Trust (REIT) is a financial asset that is quoted in the same way as a stock, which allows an investor to have exposure to the real estate sector of the US economy. In other words, if we buy shares of a REIT we are investing indirectly in houses, apartments, hotels, office buildings, etc. Unlike direct investment in real estate , which has a liquidity problem, a REIT provides liquidity, because we can buy and sell our shares at any time in the open market. REITs are exempt from federal taxes at the company level.