What are REITs?

REITs, or Real Estate Investment Trusts, are companies that own or finance income-producing real estate. They’re essentially a way for everyday investors to participate in the real estate market without having to buy, manage, or finance properties directly. Think of them as a mutual fund, but instead of investing in stocks and bonds, they invest in properties like office buildings, apartments, shopping centers, and even data centers. Because of their structure, REITs are legally required to distribute a significant portion of their taxable income to shareholders as dividends, which is where the passive income comes in.

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