Exchange Traded Fund (ETF) and Real Estate Investment Trust (REIT)

[DorehaMoy]

Exchange Traded Fund (ETF)

An exchange traded fund or ETF is a listed investment fund. ETFs are securities that can be bought and sold on the stock market through a stockbroker. These funds offer a variety of asset classes, from traditional stocks to currencies or commodities.

Exchange-traded funds are similar to mutual funds, but offer lower costs and greater diversification.

If you want to invest in real estate as a passive income stream, but prefer to spread your risk, choosing an ETF may be an option to consider. Also, investing in ETFs won't require as much research on each company as with traditional stocks.

If you're not familiar with this, you might consider using online analysis tools to watch stocks move to help you decide which ETFs will best suit your investment goals.


Real Estate Investment Trust (REIT)

A real estate investment trust, or REITS, is an organization that creates or manages real estate to generate additional income. This could be one way to make passive income for someone willing to educate themselves a bit to understand how REITs work.

REITs are subject to specific requirements, such as that they must distribute a large portion of their earnings to shareholders by paying dividends. Because of the dividends they pay out, some people see them as a passive income opportunity.

The REIT model typically allows individual investors to hold shares in the various entities listed in that mutual fund's portfolio. The property can be apartments, healthcare facilities, hotels, office buildings, industrial buildings, etc.

Most of these funds specialize in a particular sector and focus their time, energy and funding on that segment of the real estate market. However, their portfolios also include diversified assets of different types and different characteristics.

Simply put, a REIT can be thought of as a public company that manages or finances real estate that provides financial returns. These funds generate a steady stream of passive income for their investors, but provide relatively less capital growth.