{"id":2192,"date":"2022-08-08T21:21:38","date_gmt":"2022-08-08T21:21:38","guid":{"rendered":"https:\/\/blog.ark7.com\/?p=2192"},"modified":"2023-07-07T17:48:00","modified_gmt":"2023-07-07T17:48:00","slug":"5-types-of-real-estate-reits-you-need-to-know-about-guide-to-reits","status":"publish","type":"post","link":"https:\/\/ark7.com\/blog\/learn\/in-depth\/crowdfunding-and-reits\/5-types-of-real-estate-reits-you-need-to-know-about-guide-to-reits\/","title":{"rendered":"5 Types of Real Estate REITs You Need to Know About – Guide to REITs"},"content":{"rendered":"
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Investing in real estate is not what it used to be! The days of needing to invest tens of thousands of dollars upfront are long behind us thanks to the advent of real estate investment trusts or REITs.<\/span><\/p>\n

REITs are a unique type of security that allows you to invest in everything from commercial and residential property to healthcare facilities and even timberlands! And the best part is that you can get started with a <\/span>few hundred dollars<\/span><\/a>.<\/span><\/p>\n

However, even if you decide REITs are the perfect way to get started with real estate investing, there are still many decisions you will have to make.<\/span><\/p>\n

Here, we will go over what REITs are, the advantages of real estate REITs, and the five different kinds of REITs.<\/span><\/p>\n

What are REITs?<\/b><\/h2>\n

REIT stands for a real estate investment trust and is an excellent way for smaller investors to get started in real estate investing without needing a lot of upfront capital. REITs were created in 1960 to get small investors involved in the then-booming real estate market. And they have been growing in popularity ever since. REITs are different than traditional stock or ETF \u00a0investments as they tend to provide more stability with lower barriers to entry.<\/span><\/p>\n

How do REITs work?<\/b><\/h2>\n

A REIT is a company that owns or invests in income-producing real estate. These properties can be from office buildings and shopping malls to warehouses and apartment complexes.<\/span><\/p>\n

When you invest in a REIT, you become a shareholder in their REIT and receive a share of the profits (or losses). REITs must pay out 90% of their taxable income to shareholders in the form of dividends, which is why they are sometimes called “pass-through” entities.<\/span><\/p>\n

These types of securities were created in the early 1960s as a way for small investors to get into the real estate market. REITs are like mutual funds, but instead of owning shares in individual companies, you own shares in a trust that owns a portfolio of real estate assets.<\/span><\/p>\n

Advantages of REITs<\/b><\/h2>\n

There are many reasons why you should consider investing in REITs. Here are just a few:<\/span><\/p>\n