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As residential real estate is working to find its footing, Real Estate Investment Trusts (REITs) have been soaring over the past year, up on average 35 percent. These are some very positive numbers for a sector that has muddled over the past few years. Real Estate Investment Trusts are investments that focus on apartments and commercial properties and are mandated to payout most of their profits to shareholders.

While a 35 percent yearly gain in REITs is not expected to continue, it is worth noting that real estate is a very broad and varied landscape. Most commentatorys will focus on the sectors that are having trouble, not on those that are showing positive gains.

So it may surprise you to know that while the residential market has been sluggish recently, real estate funds have soared an average 35% the past 12 months. Will they sustain that pace? Not likely. But bold investors might be able to enjoy solid gains in real estate stocks or a real estate mutual fund.
Real estate investment trusts, known as REITs, are in the business of buying and selling commercial real estate — apartments, shopping malls, offices and even self-storage units. Some REITs also finance real estate. By law, REITs must distribute at least 90% of their taxable income to shareholders.
REITs have some attractive features. First, they’re good diversifiers. The commercial real estate market doesn’t correlate very closely with the stock market. So by investing in REITs, you own an asset that might rise when your stock holdings fall.
Investors are also attracted to REITs’ towering dividend yields — towering, at least, compared with the typical stock’s dividend yield. The average REIT yields 3.78%, according to the National Association of Real Estate Investment Trusts. By contrast, the average stock in the Standard & Poor’s 500 index yields just 1.8%.

There’s still room for real estate funds to roam - USATODAY.com.

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1. REITs Another Way to Earn in Real Estate
2. U.S. Real Estate Index Futures To Trade on Chicago Exchange
3. Why REITs May Be Good For Your Investment Portfolio
4. Residential and Commercial Real Estate Go In Different Directions
5. Is It Time To Start Investing in REITs?