Investing in real estate can be a good deal of work, and these days in many parts of the country you probably are not racing out to buy an investment property with the fluctuation in housing prices. But there are alternatives that are out there. Real Estate Investment Trusts (REITs) are an alternative to owning an individual property just as a mutual fund is to owning an individual stock.

And they can be quite profitable.

Well, it turns out, real estate can be a great addition to many portfolios. Real estate investment trusts, REITs for short, commonly own commercial property such as apartment buildings, shopping centers and office buildings, and they have generated great returns in the past. REITs also don’t move in lockstep with the rest of the market. So, adding REITs to your portfolio can add diversity, reduce your risk and enhance your returns.
Consider what happened during the painful bear market of 2000. The Standard & Poor’s 500 index lost 9.1% in 2000, 11.9% in 2001 and 22.1% in 2002, even including dividends, says S&P. Those same years, the Dow Jones Wilshire REIT index gained 31% in 2000, 12.4% in 2001 and 3.6% in 2002.
Had you owned the Dow Jones Wilshire REIT index in addition to the S&P 500, you not only would have enjoyed greater returns but you also would have lowered your risk. That’s a great deal. via  USATODAY.com.

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