REITs are like those books that everybody quotes but nobody has read. So, let’s just say that a Real Estate Investment Trust (REIT) is like a mutual fund that deals only in real estate investments. You put your money in a common pool with which properties are bought, sold and moved in and out by a fund manager. As an owner of shares in the REIT, you will get a proportional profit as share value appreciates. Of course, you may have your proportional share of the losses also. However, shares of publicly traded REITs remain attractive to investors because they can offer great yields and receive favorable tax treatment. Plus, REITs are required to pay 90 per cent of their taxable income in dividends (after depreciation expense). They are RRSP and RRIF eligible investments and enjoy a level of liquidity unmatched by owning the underlying investments outright.

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