REITs: property investing on the stock market

A REIT (Real Estate Investment Trust) is a company that owns and operates income-producing property — offices, warehouses, shopping centres, flats — and trades on a stock exchange. Buying its shares makes you a part-owner of that property portfolio.

Why investors like REITs

• Income: REITs are typically required to pay out most of their taxable profits as dividends, so they tend to offer high income.
• Diversification: one REIT can hold dozens or hundreds of properties across regions and sectors.
• Liquidity: you can buy and sell in seconds, unlike a physical building.
• Low entry cost: invest a small amount, no mortgage or deposit needed.

Things to watch

• Share-price volatility: REITs trade like shares and can swing with markets and interest rates.
• Interest-rate sensitivity: rising rates can pressure property values and REIT prices.
• Dividend tax: REIT income is often taxed as income; tax-advantaged accounts can help.

How to own them

Buy individual REITs, or a REIT ETF/fund for instant diversification across the whole sector.

Key takeaway

REITs deliver much of property's income and diversification benefits with the convenience and liquidity of shares — a practical way to add real estate without the hassle of being a landlord.