What does a Real Estate Investment Trust (REIT) typically invest in?

A Real Estate Investment Trust, or REIT, typically invests in real property, like commercial properties, apartment buildings, and hotels, or in mortgage loans that finance real estate transactions. The primary objective of a REIT is to generate income from these real estate investments, which is then distributed to shareholders in the form of dividends. This structure allows individuals to invest in large-scale, income-producing real estate without having to buy and manage properties directly.

This focus on tangible assets like real estate distinguishes REITs from other investment vehicles, as they provide a unique way to benefit from real estate markets without the need for direct ownership or management responsibilities. Therefore, the core investment strategy of a REIT aligns with this emphasis on real property and mortgage-related investments. Other options, such as stocks in various industries, cryptocurrency, and government bonds, do not fit the traditional investment model of REITs, which is specifically centered around real estate.