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🏠 Real Estate · Lesson 4 of 8 · 8 min

REITs — Real Estate Without the Landlord Calls

🏢 Every time your phone connects to a cell tower, someone is collecting rent on it — and by law, at least 90% of their taxable income has to go to shareholders. That's a REIT: real estate income with zero tenants, zero toilets, and zero 2am phone calls.

💡 Key idea

REITs = real estate exposure + stock liquidity + mandatory 90% dividend payout.

🧠 Why it matters

Real Estate Investment Trusts (REITs) own income-producing properties and must pay 90% of taxable income as dividends. You buy shares like a stock and collect rent checks you never had to chase down yourself.

🌍 In the real world

📡 American Tower Corp is a REIT that owns roughly 150,000 communications sites worldwide. Every time your phone makes a call, they collect rent from AT&T, Verizon, and T-Mobile — and pay shareholders a dividend yielding around 4% a year, while you sleep.

📌 Takeaways

  • Trade like stocks, pay like landlords
  • Must distribute 90% of income as dividends
  • Types: residential, commercial, industrial, healthcare

✅ Test yourself

What must REITs do with most of their income?
  1. Reinvest it all
  2. Pay at least 90% as dividends
  3. Buy more properties only
  4. Give it to the government

Answer: B · Pay at least 90% as dividends

REITs are required by law to distribute at least 90% of taxable income as dividends — which is why they yield more than most stocks.

How do you invest in a REIT?
  1. Buy physical property
  2. Buy REIT shares like any stock through a brokerage
  3. Apply for a mortgage
  4. Only through a financial advisor

Answer: B · Buy REIT shares like any stock through a brokerage

REITs trade on stock exchanges just like shares of Apple or Tesla. You can buy $100 worth through any brokerage.

What's the main advantage of REITs over owning physical real estate?
  1. Higher guaranteed returns
  2. No taxes ever
  3. Liquidity — sell instantly, no tenants, no maintenance calls
  4. Government backing

Answer: C · Liquidity — sell instantly, no tenants, no maintenance calls

REITs let you own real estate income without managing properties, dealing with tenants, or waiting months to sell. It's the liquid version.

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