Why It Matters
REITs are a powerful way for individuals to invest in real estate. As compared to privately owning a building, shares of REITs are more liquid (because they can be bought and sold freely on an open market) while still offering the relatively predictable revenue stream one comes to expect when collecting rent from a tenant.
Because of the high amount of income the REIT must distribute, REITs are associated with high dividend yields. They also have tangible assets (land, buildings, etc.), which makes them a relatively stable, low-volatility equity. Because of this, they often grow more slowly than the S&P and Dow Jones Industrial Average (DJIA).
Source: Investing Answers
