An entity that invests in real estate properties or assets such as mortgages. REITs receive special tax considerations and typically offer higher yields for investors. There are basically three types: equity REITS (the most common), which invest in, or own, real estate and make money from rents; mortgage REITs, which lend money to owners and developers or invest in financial instruments secured by real estate mortgages; and hybrid REITs, which are a combination of the two. Many REITs also trade like stocks on an exchange. These must file reports with the Securities and Exchange Commission.