You can buy a REIT through a brokerage account the same way you buy stocks or mutual funds

A REIT (Real Estate Investment Trust) is a company that owns and operates income-producing real estate. When you buy shares of a REIT, you own a piece of that company. Most REITs trade on major stock exchanges — you purchase them through a brokerage account, not directly from the REIT itself.

The process takes minutes once your account is open. You search for the REIT by its ticker symbol, enter the number of shares you want, and complete the transaction like any stock purchase. Your shares settle in two business days, and you own them outright.

REITs come in three forms: publicly traded (listed on exchanges like NYSE or NASDAQ), publicly non-traded (sold through brokers but not exchange-listed), and private (sold only to accredited investors). Most individual investors buy publicly traded REITs because they are liquid, transparent, and require no special status.

Key Takeaways

  • You need a brokerage account with a firm like Fidelity, Charles Schwab, or Vanguard to buy publicly traded REITs.
  • Search for the REIT by its ticker symbol, decide how many shares to buy, and place the order like you would for any stock.
  • Publicly traded REITs are the most straightforward option for individual investors because they trade during market hours and you can sell anytime.
  • REITs must distribute at least 90 percent of their taxable income to shareholders as dividends, which are taxed as ordinary income.
  • You can hold REITs in a regular taxable account, an IRA, or a 401(k), depending on your brokerage and retirement plan rules.

Opening a brokerage account

You cannot buy a REIT without a brokerage account. This is a straightforward process that takes 10 to 15 minutes online. You will need your Social Security number, a valid ID, proof of address (a utility bill or bank statement works), and a funding method — a bank account or wire transfer.

Major brokerages that offer REIT trading include Fidelity, Charles Schwab, E*TRADE, Vanguard, and Interactive Brokers. Each charges different commissions and offers different research tools. Many brokerages charge no commission to buy or sell stocks and ETFs, though some may charge for certain mutual funds or specialty products.

Once your account is funded, you can begin trading immediately. The account type matters: a regular taxable brokerage account has no contribution limits but you pay taxes on dividends and gains each year. A traditional or Roth IRA lets you hold REITs tax-deferred or tax-free, but has annual contribution limits and withdrawal rules.

Finding and researching REITs before you buy

REITs focus on different property types: apartments, office buildings, shopping centers, data centers, warehouses, hotels, and healthcare facilities. Each sector performs differently depending on economic conditions and interest rates. A REIT that owns apartment buildings behaves differently from one that owns data centers.

Your brokerage platform lets you search by ticker symbol or company name. Most platforms show the REIT's sector, current price, dividend yield, and recent performance. You can also use financial websites like Yahoo Finance, Morningstar, or the REIT's own investor relations page to read quarterly earnings reports and management commentary.

Key numbers to look at include the dividend yield (annual dividend divided by share price), the payout ratio (what percentage of earnings goes to dividends), and the REIT's debt level. A very high yield can signal financial stress. A low payout ratio may mean the REIT is reinvesting profits into property improvements or acquisitions.

Placing your first REIT order

Once you have chosen a REIT and funded your account, buying shares takes three steps. First, log into your brokerage account and search for the REIT by its ticker symbol — for example, SPY is not a REIT, but VNQ is an ETF that holds many REITs. Second, decide how many shares you want to buy. Third, choose your order type.

A market order buys shares at the current market price immediately. A limit order lets you set a maximum price you will pay; the order executes only if the price drops to that level or below. For most investors, a market order is simpler and executes right away. Limit orders are useful if you want to wait for a better price, but there is no may provide the order will fill.

After you place the order, it settles in two business days. During that time, the shares are yours but the transaction is still processing. You will see the shares in your account once settlement is complete. You can then hold them, sell them, or reinvest the dividends.

Understanding REIT dividends and taxes

REITs are required by law to distribute at least 90 percent of their taxable income to shareholders as dividends. This is why REIT yields are often higher than stock yields. Most REITs pay dividends quarterly, though some pay monthly.

The tax treatment depends on where you hold the REIT. In a taxable brokerage account, REIT dividends are taxed as ordinary income at your marginal tax rate — not at the lower capital gains rate. This makes REITs more tax-efficient inside a retirement account like a traditional IRA or 401(k), where dividends are not taxed until you withdraw money.

You can set your brokerage account to reinvest dividends automatically, which buys more shares with the dividend payment. This compounds your investment over time but does not change the tax bill. You still owe taxes on the dividend whether you reinvest it or take it as cash.

Choosing between individual REITs and REIT ETFs or mutual funds

You can buy individual REIT shares, or you can buy a fund that holds many REITs. A REIT ETF (exchange-traded fund) holds dozens or hundreds of REITs and trades like a stock. A REIT mutual fund works similarly but is priced once per day instead of continuously throughout the day.

Individual REITs give you control over which properties and sectors you own. You might buy a data center REIT if you believe that sector will outperform. A REIT fund spreads your money across many properties and sectors, reducing the risk that one REIT performs poorly.

REIT funds typically charge an annual expense ratio — a small percentage of your investment that covers management and operating costs. This ranges from 0.08 percent for a low-cost index fund to 0.75 percent or higher for actively managed funds. Individual REITs have no ongoing fee, but you pay a commission if your brokerage charges one (though most do not for stocks).

Common mistakes to avoid when buying REITs

One mistake is buying a REIT solely for its high dividend yield without checking whether the REIT can sustain that payout. A REIT with a 10 percent yield when most others pay 3 to 4 percent may be in financial trouble or may have cut its dividend recently. Check the payout ratio and the REIT's debt level before assuming the yield is safe.

Another mistake is holding REITs in a taxable account when you have room in a retirement account. Because REIT dividends are taxed as ordinary income, you pay more tax each year than you would with stocks or stock funds. Moving REITs to an IRA or 401(k) can save thousands in taxes over time.

A third mistake is buying too many individual REITs without diversification. If you own five apartment REITs, you have concentrated risk in one sector. A REIT fund or a mix of REITs across different property types reduces that risk.

Frequently Asked Questions

Do I need a lot of money to start buying REITs?

No. Most brokerages have no minimum account balance. You can buy a single share of a REIT for whatever the current share price is — this might be $50, $100, or $200 per share depending on the REIT. REIT ETFs and mutual funds work the same way.

Can I hold REITs in a retirement account like an IRA or 401(k)?

Yes. Most brokerages let you buy REITs inside a traditional IRA, Roth IRA, or 401(k). This is actually preferable because REIT dividends are taxed as ordinary income, so sheltering them in a tax-deferred or tax-free account saves you money. Check with your plan administrator or brokerage to confirm REIT trading is available in your specific account.

What happens if a REIT cuts its dividend?

The share price usually falls when a dividend is cut because investors buy REITs partly for the income. You still own the shares and can hold them, sell them, or wait for the dividend to recover. A dividend cut does not automatically mean the REIT is failing — it may signal that management is redirecting cash to property improvements or debt reduction.

Can I sell my REIT shares anytime?

Yes, if you own publicly traded REITs. You can sell during market hours just like you would sell a stock. The sale settles in two business days. Publicly non-traded REITs and private REITs are much harder to sell and may have holding periods or redemption restrictions — check the prospectus before buying.

How do I know if a REIT is a good investment?

Compare the REIT's dividend yield, payout ratio, debt level, and property occupancy rate to others in the same sector. Read the quarterly earnings report and management's commentary. Consider whether the property type (apartments, data centers, warehouses) fits your outlook for the economy and interest rates. No single metric tells the whole story.