Which of the following is a benefit of investing in a REIT?

Investing in a Real Estate Investment Trust (REIT) offers several advantages, among which diversification and liquidity stand out prominently.

When you invest in a REIT, you are essentially buying shares in a company that owns, operates, or finances income-producing real estate across a range of sectors, such as residential, commercial, and industrial properties. This model allows investors to benefit from the collective ownership of various properties, spreading risk across multiple assets and geographical locations. As a result, if one property underperforms, it may be offset by better performance in another, enhancing the overall stability of the investment portfolio.

Additionally, REITs are traded on major stock exchanges, providing investors with liquidity similar to stocks. This means that investors can buy and sell shares with relative ease, allowing for timely access to capital without the complexities associated with directly owning real estate, where selling a property can take considerable time and effort.

The other options present benefits that are either not typically associated with REITs or misrepresent the characteristics of real estate investing. For example, direct management of properties involves hands-on responsibilities and decision-making, which is not a feature of investing in a REIT as investors do not manage the properties directly. Similarly, there are no guaranteed returns in