What is a real estate investment trust?

    Published: 06-16-2009
    Views: 10,709
    Financial Advisor David John Marotta defines a real estate investment trust.

    David John Marotta

    David John Marotta is the President of Marotta Wealth Management, a fee-only financial planning and asset management firm in Charlottesville, Virginia. He is an oft-quoted writer and speaker on financial matters and his weekly financial column can be found at www.eMarotta.com

    Host: What is a Real estate investment trust?

    David Moratta: A Real Estate Investment Trust also known as a REIT, is a corporation that purchases and manages income producing properties. So, they may own a shopping mall, they may own an apartment complex, they may own an office building and they rent that office building or apartment complex out or they run the shopping mall and lease it to various people. Real Estate investment trusts are also hard assets and in times of a dropping interest rate, real estate is going do very, very well. In times of a rising interest rate real estate is not going to do as well. So, real investment trust are a good hard asset, but you need to be careful about where interest rates are at.