A Real Estate Investment Trust (REIT) is similar to a fund but is associated with a company that owns income-producing real estate. The real estate property owned or financed by the REIT can be diverse and ranges from hospitals to commercial offices.
For an investor, a REIT allows them to invest in real estate across a broad range of sectors with the benefit of not having to actually buy and finance the real estate themselves. REITs can generate incomes through rent accrued or eventual sales on real estate. As a result, REITs can provide investors with a steady income and diversification.
The majority of REITs are available to trade on stock exchanges such as the London Stock Exchange.