A Primer on How to Invest in REITs

It isn't hard to buy real estate investment trusts (REITs). Most trade on the stock exchange, so like other stocks they can be bought and sold through a licensed broker. REITs are well suited to income investors, since they must pay out at least 90% of their net taxable income in the form of dividends to maintain their status as REITs. These dividends often have relatively high yields.

For those interested in REITs, here's a brief primer on what to look for in a potential investment.

In choosing a REIT, investors should first determine whether they are interested in an equity REIT (one that invests directly into property), or a mortgage REIT (which puts its money in mortgages and mortgage-backed securities). Several REITs combine the two flavors.

Source: Fool.com