What type of properties do REITs primarily invest in?

Real Estate Investment Trusts (REITs) primarily invest in commercial and income-generating real estate. This includes a variety of property types such as office buildings, shopping malls, apartments, hospitals, and hotels that generate rental income and are typically managed by the REIT. The primary goal of a REIT is to provide a steady stream of income to its investors, which is achieved through the ownership and management of properties that are actively generating revenue.

Investing in commercial and income-generating real estate allows REITs to benefit from both the appreciation of property values over time and the cash flow from rent payments. This is in contrast to other property types such as vacant lots or government-owned real estate, which don't provide immediate income and may require significant development efforts to generate returns.

In summary, REITs target properties that not only have the potential to appreciate in value but also provide consistent income through operations, making them a key player in the commercial real estate market.