4 Quick Facts That Simplify REITs (Real Estate Investment Trusts)

REITs are an asset class you should know about and understand

Tunji Onigbanjo
6 min readMay 1, 2020


REIT Word Cloud by EpicTop10

A REIT, real estate investment trust, is a company that owns, operates, or finances real estate. Real estate is real property. REITs are generally focused on the commercial real estate space and invest in properties such as apartment buildings, office buildings, data centers, cell towers, medical facilities, retail centers, hotels, and warehouses. REITs in the U.S. were established by Congress in 1960 to give all investors access to income-producing real estate. For a quick history lesson on REITs, check out this article. REITs are historically one of the best performing asset classes. The FTSE Nareit All Equity REITs Index is considered one of the main benchmarks of the U.S. real estate market. Below, you can view a chart of its performance that showcases its returns compared to the other major U.S. benchmarks by the National Association of Real Investment Trusts:

Page 1 of “REITWatch: A Monthly Statistical Report on the Real Estate Investment Trust Industry” by National Association of Real Investment Trusts (March 2020)

Over longer periods, REITs are high performing assets. Also, in shorter periods they are still great performing assets. REITs can be slightly confusing to understand in the beginning, but once you understand the fundamental aspects of REITs, you will be able to conduct research and find REITs that best fit your investment strategy.

Disclaimer: I am not a financial advisor. I do not know your financial situation. I am purely sharing the information I have learned for educational purposes.

1. Most REITs Are Publicly Traded

An advantage of REITs is that many of them are traded on major stock exchanges, meaning that they are as easily accessible as stocks. Unlike investing directly into real estate, REITs are very liquid. There are fewer opportunities of making huge amounts of money through leverage when comparing investing directly into real estate to REITs, but the idea of being able to own real estate without doing much work is what helps to make REITs attractive. Other classifications of REITs are public non-traded REITs, which are REITs that are registered with the U.S. Securities