With REITs, It's ... Segment, Segment, Segment

Real estate investment trusts were created in the 1960s to allow investors to buy and sell shares of income-producing properties much as they would trade stocks and bonds. By definition, a company organized as a REIT must have most of its assets in buildings, land, or mortgages and must distribute at least 90 percent of its taxable income to shareholders via dividends. That’s why income investors flock to REITs, which boast an average dividend yield of 3.8 percent, well north of the 2 percent offered by the Standard & Poor’s 500-stock index. The industry has grown to include companies that specialize in apartment houses, office buildings, hotels, self-storage centers, hospitals, assisted-living facilities, and even prison operations.