Real estate is one of the most proven wealth-building asset classes in history — but buying a rental property requires $50,000+ for a down payment, a mortgage, and tenants to manage. REITs give you the returns without any of that.
What Is a REIT?
A Real Estate Investment Trust (REIT) is a company that owns income-producing properties — apartments, offices, warehouses, hospitals, data centers — and is legally required to pay out at least 90% of taxable income as dividends to shareholders.
Types of REITs
| Type | Properties Owned | Typical Yield |
| Residential | Apartment buildings, single-family | 3–4% |
| Industrial | Warehouses, distribution centers | 2–3% |
| Healthcare | Hospitals, senior living | 3–5% |
| Retail | Shopping centers, strip malls | 5–7% |
| Data Center | Server farms, cloud infrastructure | 2–3% |
| Mortgage REIT | Mortgages (not properties) | 10–15% (higher risk) |
Best REIT ETFs for Beginners in 2026
- VNQ (Vanguard Real Estate ETF) — Largest REIT ETF, 160+ holdings, ~4% yield, 0.12%
- SCHH (Schwab US REIT ETF) — Lowest fees at 0.07%, similar exposure to VNQ
- ZRE (BMO Equal Weight REITs ETF) — Canadian REIT ETF for TSX-listed REITs
Tax Tip for Canadians
REIT dividends are typically taxed as ordinary income (not eligible dividends). Hold REIT ETFs inside your TFSA or RRSP to avoid income tax on distributions entirely.
| AFFILIATE LINK PLACEMENTS
Questrade $50–80 CPA — After ETF buying section — free ETF purchases, TFSA/RRSP Fundrise $100 per investor — REITs vs crowdfunding comparison section |
| Disclaimer: This article is for educational purposes only and does not constitute financial advice. All investments carry risk. Please consult a qualified financial advisor before making investment decisions. |
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