Real estate investment trusts (REITs) generally own property that they lease out to a collection of tenants. The benefit for investors is that they get access to a portfolio of institutional-level income-producing properties with professional management. There's a small wrinkle here, however, when a company spins off a REIT, and it is something that investors need to watch very carefully. Every so often things can go sideways.

For most people, investing in real estate isn't a cost-effective thing to do because the money needed to create a diversified portfolio is too great. And the property types available without access to vast sums of money are pretty limited, too. Those are two of the reasons why REITs were created. Effectively, investors pool their money, hire professional property managers, and create an institutional-level property business. 

Image source: Getty Images.

Continue reading

Source Fool.com