Are REIT dividends qualified?

Mostly not; they're usually taxed as ordinary income, though a 20% QBI deduction may apply.

REIT vs. owning rental property?

REITs are liquid and hands-off but give you no control over the properties.

REITs

📈 Economics By CampusDown Wiki Editorial Team Last updated October 26, 2026

A real estate investment trust (REIT) owns or finances income-producing property and passes most of the rent to shareholders as dividends.

Contents

1. How REITs work
2. Rates and risk
3. FAQ
4. References

How REITs work

Created by Congress in 1960, REITs let everyday investors own slices of office towers, warehouses, and apartments. In exchange for avoiding corporate tax, they must distribute at least 90% of taxable income, which is why their dividend yields run high. Most trade on major exchanges like any stock.

Rates and risk

Because REITs borrow heavily and pay bond-like income, rising interest rates tend to hit their prices. Sector matters too: offices struggled after remote work, while data centers and industrial boomed. Many investors hold a REIT index fund as part of their asset allocation.

FAQ

Are REIT dividends qualified?: Mostly not; they're usually taxed as ordinary income, though a 20% QBI deduction may apply.
REIT vs. owning rental property?: REITs are liquid and hands-off but give you no control over the properties.

Sources reviewed: 2026-10-26

References

Chan, S. H., Erickson, J., & Wang, K. (2003). Real Estate Investment Trusts: Structure, Performance, and Investment Opportunities. Oxford University Press.
Nareit. What's a REIT?

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This article was last updated on October 26, 2026. It is based on widely recognized original works and textbooks; when citing it in a paper, please check the original sources listed in the references.