A Real Estate Investment Trust or REIT (rhymes with treat) is a tax designation for a corporation investing in real estate that reduces or eliminates corporate income taxes. The REIT structure was designed to provide a similar structure for investment in real estate as mutual funds provide for investment in stocks.

Like other corporations, REITs can be publicly or privately held. Public REITs may be listed on public stock exchanges like shares of common stock in other firms.

History

The United States Congress created REITs in 1960 to give anyone and everyone the ability to invest in large-scale commercial properties. Subsequently, REITs were introduced in other countries as a means to invest in a portfolio of residential and commercial property. In America, brokers suggest that REITs make up about 5 to 10 percent of an investors portfolio.