What is a Real Estate Investment Trust (REIT)?

A Real Estate Investment Trust (REIT) is essentially a trust that holds and manages income-producing real estate assets. This structure allows investors to pool their resources to invest in a diversified portfolio of real estate properties or mortgages, making it easier for individuals to invest in real estate without directly purchasing properties.

One of the key features of a REIT is that it typically operates as a company that sells shares to investors and uses that capital to buy, manage, and sell real estate assets. The income generated from these properties, such as rent and sales, is usually distributed to shareholders in the form of dividends. This structure provides a way for investors to participate in the real estate market and benefit from potential income and capital appreciation without the need for direct ownership of properties.

The other options do not accurately define a REIT. A legal partnership between multiple companies does not encompass the specific nature of how REITs operate in real estate markets. A corporate structure for real estate developers may refer to various business entities involved in real estate development but does not describe the investment aspect that REITs focus on. Lastly, a type of mortgage brokering service pertains to facilitating loans rather than managing real estate assets directly, which is the core function of a REIT.