What are REITs and how do they work?

REITs (Real Estate Investment Trusts) are companies that own, operate, or finance income-generating real estate. They allow you to invest in a diversified portfolio of properties with a small amount of money and earn dividends from rental income.

What are the benefits of investing in REITs?

REITs offer several benefits, including a low barrier to entry (you can buy shares for under $100), instant diversification across many properties, and passive income through legally-required dividend payouts. They are also highly liquid, unlike physical property.

Are REITs a good investment for beginners?

Yes, REITs are considered an excellent starting point for beginners who want to invest in real estate. They provide a simple, hands-off way to gain exposure to the property market without the large capital requirements or management responsibilities of owning a physical property.

The Complete Guide to REITs: How to Own Real Estate for Under $100

Want to collect rent checks without dealing with tenants? Dream of owning a piece of a skyscraper or a massive shopping mall? For most people, the high cost of entry makes this impossible. But what if you could invest in a massive portfolio of properties for the price of a nice dinner?

Welcome to the world of **Real Estate Investment Trusts**, or **REITs** (pronounced "reets"). They are one of the most powerful and accessible tools for anyone looking to add the power of real estate to their portfolio.

A city skyline with a rising stock chart overlay, representing how Real Estate Investment Trusts (REITs) allow you to invest in a portfolio of properties with ease.

What Exactly is a Real Estate Investment Trust (REIT)?

Imagine a giant real estate pizza, made up of apartment buildings, office towers, warehouses, and hotels. As an individual, you can't afford to buy the whole pizza. A REIT is a company that owns this giant pizza, and it allows you to buy a single slice. By buying a share of the REIT, you become a part-owner of all its properties and are entitled to a slice of the profits (the rent collected).

Why REITs are a Game-Changer for Beginner Real Estate Investors

REITs solve the biggest problems that stop people from investing in real estate. Here’s how:

Low Cost of Entry

You don't need hundreds of thousands for a down payment. You can buy a share in a REIT for as little as $50 or $100.

Instant Diversification

One share can give you ownership in hundreds of properties across different states or even countries, reducing your risk significantly.

Passive Income

REITs are legally required to pay out at least 90% of their taxable income to shareholders as dividends. This means consistent cash flow directly to you.

High Liquidity

Unlike a physical property that takes months to sell, you can buy or sell shares of a publicly-traded REIT in seconds through any brokerage account.

How to Buy Your First REIT in 3 Simple Steps

Getting started is as easy as buying a stock:

Open a Brokerage Account: If you don't already have one, open an account with a trusted online broker.
Research Top REIT ETFs: For beginners, the easiest way is to buy a REIT ETF, which is a basket of many different REITs. Look up popular tickers like **VNQ** (Vanguard Real Estate ETF) or **SCHH** (Schwab U.S. REIT ETF).
Place Your Order: Decide how much you want to invest, enter the ticker symbol, and click "buy." It's that simple.

Key Takeaways: Your REITs Cheat Sheet

REITs are companies that let you invest in large-scale real estate portfolios with very little money.
They offer powerful benefits: diversification, high dividend income, and easy trading.
For beginners, a diversified REIT ETF (like VNQ) is the simplest and safest way to start.
You get the financial benefits of being a landlord without the late-night calls about leaky toilets.