What are the different types of REITs?
The majority of REITs are equity based. This means that the REIT is listed on a stock exchange and invests in property to generate an income. Mortgage REITs provide finance to purchase property and generate income from the interest generated. There are also REITs that are listed on a stock exchange but do not trade and those that remain private and are not listed on a stock exchange.
How to qualify as a REIT
REITs need to meet specific criteria to qualify as a REIT, which includes distributing 90% of their net property rental income to investors.