What is the primary function of a real estate investment trust (REIT)?

The primary function of a real estate investment trust (REIT) is to allow investors to earn income through real estate ownership without direct property control. REITs offer a way for individuals to invest in large-scale commercial real estate projects without the need to buy or manage property directly. By pooling the resources of many investors, a REIT can purchase and manage a portfolio of real estate assets, such as office buildings, shopping centers, and apartments.

Investors in a REIT can receive dividends generated from the income produced by the properties held in the trust. This structure not only diversifies their investment but also provides potential liquidity, as shares of publicly traded REITs can be bought and sold on major stock exchanges. It represents a compelling way for individuals to profit from real estate markets while enjoying the benefits of professional management.

This arrangement distinguishes REITs from options that focus on direct property management, independent sales platforms, or specific financing aspects for mortgage approvals.