Texas SAE Real Estate Investment Practice Exam

Investing in a Real Estate Investment Trust (REIT) primarily allows investors to earn income from commercial real estate without the need to directly own and manage the properties themselves. This is a significant advantage, as REITs typically pool capital from many investors to purchase, manage, and sell real estate assets. The income generated from these properties, such as rent and capital gains, is then distributed to shareholders in the form of dividends.

This structure provides individual investors access to a diversified portfolio of real estate investments that they may not be able to acquire on their own. It also offers liquidity similar to stocks, as REIT shares can often be traded on stock exchanges. This means that investors can enjoy the potential benefits of real estate investment, such as passive income and asset appreciation, while obviating the risks and responsibilities associated with direct ownership, such as property management and maintenance.

The other options do not accurately represent the benefits associated with REITs. While investing in REITs might come with certain risks, they allow for diversification and income generation, making them an attractive option for many investors.