Investing directly in real estate can be lucrative, but it's also challenging.
Doing research on particular individual properties is time-intensive, and transactions can take a long time to complete.
ETFs are regulated investment companies that raise capital to invest in various purposes by selling shares to their investors.
ETFs typically have specific investment objectives that they then follow in investing the money they've raised.
Like REITs, ETFs offer even small investors with little money to invest a chance to get exposure to a wide range of diversified investments.
A single share of an ETF often costs less than 0, but that one share can give you access to dozens or even hundreds of investments held within the ETF's portfolio.
In some cases, investing in real estate can help offset losses in other investment holdings, preserving the total value of your total investments.
Moreover, there's only a finite amount of real estate in the world, and especially in certain locations, scarcity has led to impressive long-term returns for real estate investors.
REITs must have a diversified shareholder base of at least 100 investors, with no five investors having more than a 50% stake in the REIT.
Most importantly, REITs must pay 90% of their taxable income to their shareholders in the form of distributions.