How to Build Passive Income with REITs: A Beginner’s Guide

A REIT is a real estate investment trust.

When you invest in real estate, you don't actually own the real estate itself.

But when you own the property yourself, you now have to operate and manage the property.

When the Tax Cuts and JOBS Act was passed, investors in REITs get a 20% deduction on the income you generate that you generate in one year .

That means if you make $ 10,000 in one REIT, you can take a little a little tax off against that deduction.

When you invest in a REIT, you're not getting direct exposure to the property. You're getting ownership into the company which owns the property.

Mortgage REITs are real estate investment trusts, real estate companies that don't invest in the physical properties.

The two largest categories of REIT 's and the two types that I'm going to highlight in this video are equity.

Investing in mortgage REITs is generally more risky and more volatile than investing in equityREITs.

Because of that, you'll generally see higher dividends on these types of mortgage-backed securities.