REITs were created to make real estate investing more accessible. Instead of purchasing an entire building or managing rental properties, investors can buy shares of a REIT and earn income from the real estate portfolio it manages. These properties may include apartments, office buildings, shopping centers, warehouses, data centers, hotels, or even specialized assets like cell towers.
What makes REITs unique is their structure. To maintain REIT status, they must distribute at least 90% of their taxable income to shareholders. This requirement makes REITs some of the highest-yielding investments on the stock market. Their income typically comes from rent, leases, or interest from real estate loans—depending on whether the REIT owns property, finances property, or does both.
REITs also provide liquidity. Unlike physical real estate, which can take months to buy or sell, REIT shares trade on major stock exchanges just like regular stocks. This makes them attractive for investors seeking steady income, diversification, and exposure to real estate cycles without the headaches of property management.
REITs matter because they offer a simple way to invest in real estate markets while earning regular income. They help diversify portfolios and allow investors to gain exposure to property sectors they might not be able to access directly.
Most REITs earn money from rent or long-term leases on the properties they own. After covering operating expenses, they distribute nearly all remaining income as dividends. Mortgage REITs operate differently—they earn interest by financing real estate or purchasing mortgage-backed securities. In both cases, REITs turn real estate cash flow into shareholder income.
REITs must distribute at least 90% of taxable income to maintain their tax-advantaged status. This requirement results in dividend yields that are often higher than market averages. Instead of reinvesting profits internally, REITs return most of their earnings directly to investors.
Rising interest rates increase borrowing costs for REITs and can make bonds more attractive compared to high-yielding REIT dividends. This often pressures REIT stock prices. Conversely, when rates fall, borrowing becomes cheaper and income-seeking investors tend to favor REITs, supporting their valuations.
A REIT specializing in data centers leases large facilities to cloud-computing companies. Tenants pay long-term contracts, generating steady rent. The REIT distributes most of this income as dividends, giving shareholders consistent returns without needing to manage physical properties.
FinFeedAPI’s SEC API is the best match for analyzing REITs because it provides access to their 10-K and 10-Q filings, which reveal property holdings, rental revenue, debt levels, occupancy trends, and dividend distributions. Developers can use this data to compare REIT performance, analyze risk, and build income-focused investment tools.
