You can buy REITs through a standard brokerage account, a retirement account, or directly from the REIT sponsor
REITs trade on stock exchanges like any other publicly listed company, so you buy them the same way you buy individual stocks. The most common route is opening a brokerage account with a firm that offers stock trading — Fidelity, Charles Schwab, E*TRADE, Vanguard, and TD Ameritrade all carry REIT shares. You can also buy REITs inside an IRA, 401(k), or other retirement account if your plan provider offers stock trading. A smaller number of REITs sell shares directly to investors without going through a broker, though these are less common and often have higher minimum investments.
The choice between these routes depends on your account type, how much you want to invest, and whether you want to hold the REIT long-term or trade it. Each path has different costs, tax treatment, and liquidity — meaning how quickly you can sell if you need cash.
Key Takeaways
- Public REITs listed on major exchanges can be bought through any brokerage that offers stock trading, with commission costs ranging from zero to a few dollars per trade depending on your broker.
- Buying REITs inside a retirement account like an IRA or 401(k) defers taxes on dividends and gains until you withdraw, but you cannot access the money before age 59½ without penalty in most cases.
- Non-traded REITs sold directly by sponsors often require minimum investments of $1,000 to $25,000 and charge upfront fees of 7 to 10 percent, making them more expensive than exchange-traded options.
- REIT mutual funds and exchange-traded funds (ETFs) let you own shares in multiple REITs with a single purchase, spreading risk across different property types and managers.
Buying REITs through a standard brokerage account
A brokerage account is the most straightforward way to buy publicly traded REITs. You open an account with a broker, deposit cash, and place an order for REIT shares just as you would for any stock. Most major brokers — including Fidelity, Charles Schwab, E*TRADE, Vanguard, and TD Ameritrade — charge zero commission on stock trades, meaning you pay no fee to buy or sell. Some smaller or discount brokers may charge a small per-trade fee, typically $5 to $10, so check your broker's fee schedule before opening an account.
The main advantage of a brokerage account is liquidity and control. You can sell your shares whenever the market is open, usually within minutes. You also see the price of your REIT shares in real time and can decide exactly when to buy or sell. The downside is that you pay income tax on REIT dividends in the year you receive them, and capital gains tax when you sell shares at a profit. For long-term investors, this tax drag can be significant.
You will need to choose between buying individual REIT shares or buying REIT mutual funds and ETFs. Individual shares give you control over which properties and managers you own, but require more research. REIT funds and ETFs spread your money across many REITs, reducing the risk that one manager or property type performs poorly.
Buying REITs inside retirement accounts
If your employer offers a 401(k) or if you have an IRA, you can often buy REITs within that account. The tax advantage is substantial: dividends and capital gains grow tax-deferred, meaning you do not pay tax on them until you withdraw money from the account. For someone in a high tax bracket, this can save thousands of dollars over decades.
The trade-off is access. With a traditional IRA or 401(k), you cannot withdraw money before age 59½ without paying a 10 percent early withdrawal penalty plus income tax on the amount withdrawn. A Roth IRA lets you withdraw contributions (but not earnings) at any time without penalty, though earnings withdrawn before age 59½ are taxed and penalized. If you think you might need the money within the next several years, a retirement account may not be the right place for REIT investments.
Not all retirement plans offer the same investment choices. Some 401(k) plans limit you to a small menu of REIT mutual funds chosen by the plan sponsor. IRAs, whether held at a bank, brokerage, or credit union, typically offer access to any publicly traded REIT or REIT fund. Check your plan documents or call your plan administrator to see what REIT options are available to you.
Non-traded REITs sold directly by sponsors
Some REITs do not list their shares on a public exchange. Instead, they sell shares directly to investors through a sponsor or a network of financial advisors. These are called non-traded REITs or private REITs. They typically require a minimum investment of $1,000 to $25,000 per investor, though some have higher minimums. Because they do not trade on an exchange, you cannot sell your shares whenever you want — you have to wait for a redemption window, which the sponsor may offer once or twice a year, or not at all for several years.
Non-traded REITs also charge upfront fees, typically 7 to 10 percent of your investment, which go to the sponsor and the financial advisor who sold you the shares. This means if you invest $10,000, you might pay $700 to $1,000 in fees before your money even enters the REIT. Over time, these fees can significantly reduce your returns compared to buying a publicly traded REIT through a brokerage account.
Non-traded REITs can make sense in specific situations — for example, if you want a very long holding period and do not mind illiquidity, or if a particular non-traded REIT focuses on a property type you believe will outperform. But for most investors, the high upfront fees and lack of liquidity make publicly traded REITs a better choice.
REIT mutual funds and exchange-traded funds
Instead of buying individual REIT shares, you can buy a mutual fund or ETF that holds many REITs. A REIT mutual fund is a pool of money managed by a professional who buys and sells REIT shares on your behalf. An REIT ETF is similar, but trades on an exchange like a stock, so you can buy and sell it during market hours at a price that changes throughout the day.
Both mutual funds and ETFs spread your investment across dozens or hundreds of REITs, which reduces the risk that one manager or property type will hurt your returns. They also handle the administrative work of tracking dividends and rebalancing the portfolio. The cost is an annual fee, called an expense ratio, which typically ranges from 0.1 to 0.8 percent per year for REIT funds. This means if you invest $10,000 in a fund with a 0.5 percent expense ratio, you pay $50 per year.
The main difference between mutual funds and ETFs is how you buy them and when you see the price. Mutual funds are priced once per day after the market closes, and you buy them directly from the fund company or through a broker. ETFs trade throughout the day like stocks, so you see the price change minute by minute. For most investors, ETFs have become the more popular choice because they offer lower fees and more flexibility.
Comparing costs across purchase methods
| Purchase Method | Minimum Investment | Upfront Costs | Annual Costs | Liquidity |
|---|---|---|---|---|
| Individual REIT shares (brokerage) | Price of one share, typically $20–$100 | $0 commission at most brokers | None | Sell anytime market is open |
| REIT ETF (brokerage) | Price of one share, typically $40–$150 | $0 commission at most brokers | 0.1–0.8% expense ratio | Sell anytime market is open |
| REIT mutual fund | $500–$3,000 depending on fund | $0–5% load (sales charge) depending on fund | 0.3–1.5% expense ratio | Sell next business day after purchase |
| Non-traded REIT | $1,000–$25,000 | 7–10% upfront fee | 1–2% annual fee | Redemption window once or twice yearly, or none for years |
How to open a brokerage account and buy your first REIT
If you decide to buy REITs through a brokerage account, the process takes about 10 to 15 minutes. Visit the website of a broker like Fidelity, Charles Schwab, E*TRADE, Vanguard, or TD Ameritrade and click the button to open an account. You will provide your name, address, Social Security number, and employment information. The broker will ask how much experience you have with investing and what your investment goals are — these questions help them comply with regulations, but your answers do not restrict what you can buy.
Once your account is open, you link a bank account and deposit cash. Most brokers process deposits within one to three business days. After the cash arrives, you can search for a REIT by its ticker symbol (a four- or five-letter code like "O" for Realty Income or "PLD" for Prologis) and place a buy order. You can place a market order, which buys at the current price when ready, or a limit order, which buys only if the price drops to a level you specify. Most first-time REIT buyers use market orders.
Frequently Asked Questions
Can I buy REITs in a 401(k) if my plan does not offer a REIT fund?
It depends on your plan. Some 401(k)s offer a brokerage window or self-directed option that lets you buy any publicly traded stock or fund, including individual REITs. Others restrict you to the menu of funds the plan sponsor selected. Contact your plan administrator or check your plan documents to see if a brokerage window is available.
What is the difference between a REIT ETF and a REIT mutual fund?
Both hold many REITs, but ETFs trade like stocks during market hours and usually have lower fees. Mutual funds are priced once per day and may charge a sales load (upfront fee). For most investors, ETFs are simpler and cheaper. However, some mutual funds offer lower expense ratios if you invest a large amount, so compare the total cost before deciding.
Do I have to use a financial advisor to buy a non-traded REIT?
Non-traded REITs are sold through financial advisors and broker-dealers, not directly through public exchanges. You cannot buy them through a standard brokerage account. If you are interested in a non-traded REIT, you will need to contact a registered financial advisor or broker who sells them, and you should understand the upfront and ongoing fees before committing.
What happens to my REIT dividends if I hold shares in a brokerage account?
The REIT pays dividends directly to your brokerage account, usually quarterly. You can reinvest them to buy more shares, or withdraw the cash. You will owe income tax on the full dividend amount in the year you receive it, even if you reinvest it. If you hold REITs in a retirement account, dividends are not taxed until you withdraw from the account.
Can I buy fractional REIT shares?
Many brokers now offer fractional shares, meaning you can buy a portion of a REIT share for less than the full share price. This is useful if a REIT share costs $100 but you only have $50 to invest. Check your broker's website to see if fractional shares are available and whether they charge extra for them.