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Definition: A security that trades as a stock on the stock exchange, but invests in real estate and/or mortgages.
TeenAnalyst Advice: REIT's are special trusts that receive tax advantages from the government. They're obligated to pay out 90% or more of their earnings to investors in the form of dividends so it's not unusual to see a REIT with a 10-12% dividend.
An equity REIT invests in and owns various real estate properties. Their revenues come from people renting places in those buildings.
A mortgage REIT invests in mortgages on real estate. Their revenues come from the interest paid on the mortgages.
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