REIT stands for Real Estate Investment Trust. Publicly traded REITs have to meet certain conditions to qualify as a REIT. They need to invest more than 75 percent of their assets in income generating real properties and they need to pay out 90 percent of their income in dividends to shareholders. Some REITs are specific to certain types of real estate while others hold a broad mix of commercial real estate, shopping malls, health care facilities and residential buildings. Investing in REITs is a good way for investors to diversify their portfolios as REITs don’t tend to track the main stock market indices.
