Last week, the Globe and Mail featured an article about Real Estate Investment Trusts (REITs) and their tendency to be a better investment vehicle than purchasing and renting out a condo. While only you can decide which path is the right one for you, we can help by clarifying exactly what REITs are and offer some resources for further research.

Essentially, an REIT is an opportunity to dip your toe in the real estate investment market without becoming a full-fledged landlord. REITs pool investors’ money and purchase real estate properties with that money. These trusts then pay their investors a portion of their profits, typically from monthly rents.

REITs have the ability to invest in different types of real estate – from hotels to multi-unit residential properties. This allows investors to further diversify their investment, so instead of simply investing all their money in one condo in one market – hoping that it eventually increases in value – they can reap the benefits of different real estate assets across different markets.