Key Characteristics and Investment Implications of REITs

Real Estate Investment Trusts (REITs) have emerged as a prominent vehicle for investing in real estate, offering investors diversification and liquidity, similar to stocks. This investment structure allows individuals to invest in portfolios of real estate assets and earn a share of the income produced without having to buy, manage, or finance any properties themselves.

Discuss the key characteristics of REITs, including their operational structures, how they generate income, and the benefits and risks associated with investing in them. Additionally, highlight the differences between equity REITs and mortgage REITs, and their respective roles in an investment portfolio.