Adding Real Estate To
Your Portfolio

Real estate investment trusts offer a way to diversify your portfolio by including real estate exposure without many of the risks and headaches inherent in owning property directly. As with all investments, however, you should perform thorough research to ensure the investment is in keeping with your particular circumstances.

BY SHERI WALLACE | A real estate investment trust, or REIT, essentially is a corporation or business trust that pools money from a number of investors to acquire or provide financing for a variety of income-producing real estate properties such as apartment complexes, shopping centers, hotels, assisted living facilities, and office buildings. Although REITs, by definition, are limited to real estate, they function very much like mutual funds, with investors enjoying the benefits of a diversified portfolio managed by professionals. Although real estate investment trusts were created by Congress in 1960, they were not widely used and did not gain much popularity until the early 1990s. Today, according to the National Association of Real Estate Investment Trusts (NAREIT), there are more than 300 domestic REITs, with combined assets in excess of $130 billion.