REIT, or Real Estate Investment Trust is a liquid, dividend paying means
of participating in the real estate market. They can invest in
commercial properties, mortgages, or a combination of both. Generally
they invest in shopping malls, office complexes, apartments, warehouses,
hotels, or even golf courses. Some even specialize in specific types of
properties, or geographical locations.
REIT securities pay dividends and offer possibilities of price
appreciation experienced by real estate owners. You can buy a REIT just
like you buy a stock, or mutual fund. Most of the major mutual fund
families offer these funds to their shareholders.
Because mutual funds allow shareholders to reinvest dividends in
additional fund shares, this is a good vehicle for investors looking for
stable growth. Since they are dividend paying securities, the yield will
rise as the share price declines just like a Corporate Bond. So if
interest rates continue to rise, they will produce a higher and higher
income for investors who need income as the share prices fall.