Real Estate Investment Trust (REIT)

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Definition: Real Estate Investment Trust (REIT)

Real Estate Investment Trust is a type of security which sells like a stock on the exchange but the underlying investment is on real estate in the form of properties and mortgages.

REIT is a way of indirectly investing into real estate for the investors. REIT offers various advantages to the investors over direct investment in real estate. Generally real estate lacks liquidity. But REIT provides liquidity as it trades on the exchange.

It is very hard to determine the price associated with real estate. But for REIT determination of price is simple as it is traded through exchange.

In other words REIT removes the uncertainty and risk associated with the investment in real estate to some extent.

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