The simplest way to buy a REIT

You buy a REIT the same way you buy any stock: through a brokerage account. Open an account at a broker like Fidelity, Charles Schwab, E*TRADE, or Vanguard, deposit money, search for the REIT by its ticker symbol, and place a buy order for the number of shares you want. The transaction settles in two business days, and you own the shares outright.

Most REITs trade on major exchanges — the New York Stock Exchange or NASDAQ — so you can buy them during regular market hours (9:30 a.m. to 4 p.m. Eastern time, Monday through Friday). You pay the same commission structure as any stock trade, which at most brokers is now zero dollars per trade.

If you already have a brokerage account through your employer's 401(k) plan or an IRA, you can often buy REITs there too, depending on what investment options your plan offers. Some workplace plans limit you to mutual funds or index funds, so check your plan documents or call your plan administrator to see what's available.

Key Takeaways

  • You buy individual REIT shares through any brokerage account using the REIT's ticker symbol, just like buying any stock.
  • REIT shares trade on public exchanges during market hours and settle in two business days with no commission at most brokers.
  • REIT mutual funds and exchange-traded funds (ETFs) let you own pieces of many REITs in a single fund, spreading your money across different properties and sectors.
  • Your brokerage account type — taxable, IRA, or 401(k) — affects how REIT dividends are taxed, so consider holding REITs in tax-advantaged accounts if possible.
  • You can also buy REITs through a financial advisor or robo-advisor, though this usually costs more in fees than buying directly through a discount broker.

Buying individual REIT shares versus REIT funds

When you buy a single REIT share, you own a piece of one company that owns specific properties — say, an apartment REIT that owns 50 residential complexes, or a data center REIT that owns server facilities. You get dividends from that one company's income, and your return depends entirely on how that company performs.

A REIT mutual fund or REIT exchange-traded fund (ETF) pools your money with other investors' money to buy shares in many different REITs at once. A single fund might hold 30 or 50 different REITs across different property types — apartments, offices, shopping centers, hospitals, warehouses. You own a tiny piece of each one. The fund manager handles the buying and selling, and you receive dividends from all the REITs combined.

Individual shares give you control and lower fees if you pick carefully, but you carry the risk that one company underperforms. Funds spread that risk across many companies but charge an annual expense ratio (typically 0.2% to 1% per year) and may have a sales load (an upfront commission) if you buy through an advisor. Most people new to REITs start with a fund to avoid betting everything on one property company.

Opening a brokerage account and finding the right REIT

To buy REIT shares, you need a brokerage account. Most major brokers — Fidelity, Charles Schwab, E*TRADE, Vanguard, Interactive Brokers, TD Ameritrade — let you open an account online in 10 to 15 minutes. You'll provide your Social Security number, address, employment information, and bank details for funding. There's no minimum deposit at many brokers, though some have a $500 or $1,000 minimum to start investing.

Once your account is open and funded, search for the REIT by its ticker symbol. You can find ticker symbols on the REIT's investor relations website, on financial sites like Yahoo Finance or Google Finance, or by searching "[REIT name] ticker." Enter the ticker into your brokerage's search box, review the current price and recent performance, and place a buy order for however many shares you want to purchase.

If you're unsure which individual REIT to pick, start by reading the REIT's annual report (Form 10-K) and quarterly earnings reports, both available free on the SEC's EDGAR database or the company's website. These documents explain what properties the REIT owns, how much debt it carries, and how much cash it generates. You can also compare REITs using screening tools on sites like Morningstar or your broker's research section.

Tax considerations when holding REITs

REIT dividends are taxed as ordinary income, not as capital gains, which means they're taxed at your regular income tax rate — potentially higher than the preferential rate for stock dividends. This makes REITs especially valuable to hold inside a tax-advantaged account like a traditional IRA, Roth IRA, or 401(k), where dividends grow without triggering annual taxes.

If you hold REITs in a regular taxable brokerage account, you'll owe federal income tax on the dividends each year, even if you reinvest them. You'll also owe capital gains tax when you sell shares for a profit. Many people hold REITs in an IRA or 401(k) to defer or avoid these taxes, then hold other stocks in taxable accounts.

Check whether your workplace 401(k) or IRA plan allows REIT investments. Some plans offer a self-directed brokerage window that lets you buy any publicly traded REIT, while others limit you to REIT mutual funds or index funds. If your plan doesn't offer REITs, you can always open an IRA at a discount broker and buy REITs there.

Buying REITs through an advisor or robo-advisor

You can also buy REITs through a financial advisor or a robo-advisor (an automated investment service). An advisor will recommend REITs or REIT funds based on your goals and risk tolerance, then execute the trades for you. Robo-advisors like Betterment, Wealthfront, or Vanguard Personal Advisor Services build a portfolio that may include REIT funds and rebalance it automatically.

The trade-off is cost. Advisors typically charge 0.5% to 1.5% of your assets per year in fees, or a flat hourly or annual fee. Robo-advisors usually charge 0.25% to 0.50% per year. If you're buying individual REIT shares through a discount broker, you pay zero commission and no ongoing advisory fee — just the bid-ask spread (the tiny difference between the buy and sell price). For most people starting out, a discount broker is the cheapest route.

An advisor makes sense if you want personalized guidance, have a large amount to invest, or prefer not to research REITs yourself. A robo-advisor is a middle ground: lower cost than a human advisor, but more hands-off than picking individual REITs.

How much money you need to start

You can buy a single REIT share for whatever the current share price is. REIT share prices range widely — some trade at $20 per share, others at $100 or more — so you might spend anywhere from $20 to $200 or more to buy one share. There's no minimum investment beyond the price of one share, though most brokers have no account minimum either.

If you're buying a REIT mutual fund or ETF, the minimum is usually $1 to $100 depending on the fund, and some funds waive the minimum if you set up automatic monthly contributions. Check the fund's prospectus or your broker's website for the specific minimum.

Many people start by buying a small number of shares or a small amount in a fund to learn how the market works, then add more money over time. There's no rule that says you must invest a certain amount at once.

What happens after you buy

Once you own REIT shares, you'll receive dividends — usually quarterly — paid directly into your brokerage account. Most brokers let you choose whether to take the cash or reinvest it automatically into more shares. The share price will fluctuate daily based on market demand, just like any stock. You can sell your shares anytime the market is open by placing a sell order in your brokerage account.

You'll receive annual tax documents (a 1099-DIV form) showing how much in dividends you received, which you'll use to file your taxes. If you hold REITs in a retirement account, you won't receive a 1099 — the account custodian handles the tax reporting.

Frequently Asked Questions

Can I buy a REIT directly from the company without a broker?

Most REITs don't offer direct purchase plans. You need a brokerage account to buy shares on a public exchange. Some REITs offer dividend reinvestment plans (DRIPs) that let you reinvest dividends automatically into new shares with no commission, but you still need a broker to buy the initial shares.

What's the difference between buying a REIT ETF and a REIT mutual fund?

Both hold many REITs in one fund. ETFs trade like stocks during market hours and usually have lower expense ratios (0.2% to 0.5% per year). Mutual funds trade once per day after the market closes and may have higher expense ratios (0.5% to 1% per year) or sales loads. For most people, an ETF is simpler and cheaper.

Do I need a lot of money to buy REITs?

No. You can buy a single share of a REIT for the current share price, which might be $30 to $150 depending on the REIT. You can also buy a REIT fund with as little as $1 to $100. Start small and add more as you become comfortable.

Are REITs safe to buy?

REITs are subject to market risk like any stock — the share price can go down, and the company can cut or eliminate its dividend. However, REITs are required by law to distribute 90% of their taxable income as dividends, which provides some income stability. Diversify by buying multiple REITs or a REIT fund rather than betting on one company.

Can I hold REITs in a retirement account?

Yes. You can hold REITs in a traditional IRA, Roth IRA, or 401(k) if your plan allows it. This is actually a smart move because REIT dividends are taxed as ordinary income, so holding them in a tax-advantaged account saves you money on taxes.