The National Directory of Certified Public Accountants

Ask A CPA - Investments & Financial Planning

What Is A REIT And Is It A Good Way To Invest In Real Estate ?

REIT stands for Real Estate Investment Trust, which is a publicly traded closed-end investment company that invests in a managed, diversified portfolio of real estate or real estate mortgages. The income is tax-free to the trust as long as it meets certain requirements. Like mutual funds, REITs are conduits through which earnings pass to shareholders. REITs are readily sold on the New York and American stock exchanges and thus are much more marketable than other types of real estate investments. REITs offer a good way to invest in real estate, but the investor and or his advisor should carefully screen for performance, stability, fees, costs and outlook.

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