REITs

A real estate investment trust is a company that owns, and usually operates, a portfolio of income-producing property, and that is required to pay most of its taxable income out to shareholders as dividends. In the US the rule is at least 90%. In return the REIT itself pays little or no corporate tax. REITs come in several forms. Publicly traded REITs are listed on stock exchanges and can be bought and sold like any share. Non-traded REITs are registered with regulators but do not trade on an exchange, so they are harder to exit. Private REITs are sold only to accredited or institutional investors. Most people who say "REIT" mean the first kind. A typical REIT holds dozens or hundreds of properties in one sector: apartments, warehouses, data centres, shopping centres or offices. You are buying the manager's whole strategy, not a building you chose.

Both put real estate within reach of someone with $100. The difference is what you own and how you get out. What you own. A REIT share is a slice of a company that owns property. A fractional share is a slice of an entity that owns one specific property. With a REIT you cannot pick the building. With fractional you can, and you can see its address, rent roll and occupancy before you buy. Liquidity. A listed REIT trades every second the market is open. A fractional share is sold when the property is sold, or on a secondary market if the platform runs one and there is a buyer. Blockchain-based platforms have improved this, but it is still nowhere near an exchange. Diversification. One REIT share is spread across many properties automatically. To get the same spread with fractional shares you buy several properties across several markets. Correlation. Listed REITs move with the stock market day to day, even when the underlying properties are unchanged. Fractional shares are valued against the property, so they move more slowly and more independently. Fees and taxes. Listed REITs are cheap to hold and pay dividends that are mostly taxed as ordinary income. Fractional platforms charge more, but distributions can carry the depreciation benefits of direct ownership.

REITs suit money you may need back on short notice, and investors who want real estate exposure without doing property-level research. Fractional property suits money you can leave alone for years, and investors who want to choose what they own and see the income arrive from a building they can name. Many people hold both. A listed REIT fund as a liquid core, and a handful of fractional properties chosen deliberately. Threeworld indexes the fractional side: every listing across the platforms it tracks, with the yield, minimum and access rules side by side so that choosing the building is the easy part.