Which of the following is a characteristic of a Real Estate Investment Trust (REIT)?

A Real Estate Investment Trust (REIT) is defined by its structure which allows multiple investors to pool their money to invest in real estate through the purchase of shares. This characteristic enables individuals to participate in the ownership and benefits of income-producing properties without needing to directly buy or manage real estate themselves.

The income generated from these properties, such as rent from residential, commercial, or industrial properties, is typically distributed to shareholders in the form of dividends. This not only provides a way for investors to gain exposure to real estate but also allows for diversification across multiple properties and real estate sectors.

The other options mischaracterize the nature of REITs: they do not require personal investment in property directly, are not limited to just residential properties (as they can include a variety of property types), and while they can invest in commercial properties, they are not restricted to this category alone. REITs can encompass a wide range of property types, making them versatile investment vehicles in the real estate sector.