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What are the types of REITs?

a. Equity REITs Equity REITs refer to owners of the real estate properties who lease their owned properties to companies or individuals to make money. The income is then distributed among the REIT investors as a dividend. For Eg : Equity Mutual Funds. Equity REITs generally acquire, manage, build, renovate and sell real estate. Equity real estate investment trusts' principally make their income from rental proceeds of their real estate holdings. Equity REITs more or less invest in offices, industrial, retail, residential real estate and hospitality assets like hotel and resort properties. b. Mortgage REITs Unlike equity REITs, Mortgage REITs are not the property owners but they receive EMIs against the property from the owners and developers because they lend money to real estate buyers or acquire existing mortgages or mortgage-backed securities (MBS). Their earnings are through Net Interest Margin i.e. NII (difference of interest earned on mortgage and cost of funding the loan) which they subsequently distribute among the REIT investors as dividends. For Eg : Debt Mutual Funds. Essentially mortgage REITs mainly generate their revenues from the interest that is earned on their mortgage loans. c. Hybrid REITs A hybrid REIT is a real estate investment trust that is effectively a combination of equity REITs, which own properties, and mortgage REITs, which invest in mortgage loans or mortgage-backed securities. By diversifying across both types of investments, hybrid REITs aim to have the advantage of both and reducing the risk at the same time. An example of Hybrid REITs : Hybrid Mutual Funds.