◈ GLOSSARY · INVESTING
REIT (Real Estate Investment Trust).
A definition, in plain English — with the books that teach it.
Reviewed by ClearValue Editorial Team · Jun 27, 2026
◈ DEFINITION
What it means
Definition
A REIT is a company that owns and usually operates income-producing real estate — apartments, warehouses, cell towers, malls, data centers. By law, REITs must pay out at least 90% of taxable income as dividends, which is why they tend to have high yields. They give you real estate exposure without buying buildings yourself, but they trade like stocks and can be just as volatile.
◈ IN PRACTICE
Example
A warehouse REIT might trade at $100 per share and pay $4 in annual dividends — a 4% yield. If you hold it in a taxable account, most of that dividend is taxed at your ordinary income rate, not the lower qualified-dividend rate, which is why many investors hold REITs inside an IRA.
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