Why You Should Invest in Real Estate Investment Trusts
Without getting too technical, think of a REIT as something like a mutual fund that invests in real estate, and derives the lion's share of its income from renting that real estate out, usually to other businesses. It's a way for you and me to own real estate without the hassles of being a landlord. No leases to sign. No phone calls in the middle of the night to come fix the leaky toilet. No long-term financial commitment to a piece of ground or a building. Just a share in the profits.
Why invest in REITs? I'll give you 5 reasons.
REITs have historically earned slightly better returns than stocks. I thought stocks were the all-time champions, didn't you? But from 1972, when REITs first began being tracked as a sector, through 2021 -- a period of 50 years -- equity REITs returned an average of 13.5% to investors, while stocks returned 13.1% as measured by the Standard & Poor's index.
Source Fool.com
