Many of us look to real estate investment trusts (REITs) to do what our bank accounts otherwise wouldn’t allow for: investing in real estate.

Many real estate investments wall off participation to just accredited and other high-net-worth investors. Virtually everyone is allowed to buy shares in a REIT. You might not have enough liquid cash to buy an apartment building or hotel, but if you’re reading this, you likely have the $50 or $100 it takes to buy a share of a REIT—and a REIT will typically get you exposure not to just one building, but dozens, even hundreds.

However, we can really up the ante, and diversify even further, by owning REIT exchange-traded funds (ETFs), which hold bundles of differentiated real estate stocks.

It’s a tactic worth considering. Like with any other part of the market, there’s risk involved in owning just one or two REITs if they’re concentrated in a single industry, such as housing or offices. If that area of the real estate market suffers an outsized downturn, you could absorb deeper losses than if you owned a wider swath of real estate. REIT ETFs do just that, helping you defray single-ticker risk by plugging you into dozens of REITs across several industries.

Let’s look at some of the best REIT ETFs you can buy. Each of these funds yields at least twice what the broader market does, and each of these has been given a favorable rating by one of the top independent fund research firms.

Editor’s Note: Tabular data presented in this article is up-to-date as of April 15, 2026.

Disclaimer: This article does not constitute individualized investment advice. Individual securities, funds, and/or other investments appear for your consideration and not as personalized investment recommendations. Act at your own discretion.

Table of Contents

What Is a REIT?

magnifier green houses reit etf investment 1200 — DepositPhotos

Real estate investment trusts (REITs) are a unique class of investment made up of companies that own (and sometimes operate) real estate-related assets.

REITs were created by none other than Congress, which passed this business structure into existence via the REIT Act, which itself was part of the Cigar Excise Tax Extension of 1960 that President Dwight D. Eisenhower signed into law. The goal was to make real estate more accessible to everyday investors—after all, we don’t all exactly have the hundreds of thousands or millions of dollars necessary to buy apartment complexes and office buildings.

So, what does “real estate investment trust” mean? Let’s break down the name:

“Real estate”: REITs must derive at least 75% of their gross income from real estate-related income, and 75% of their assets must be real estate-related assets. (I keep saying “related” because REITs don’t always have to own physical properties—they can own real-estate related assets such as mortgages, too.)
“Investment trust”: These words are important to understanding REIT ownership. There are certain thresholds that set REITs apart from conventional publicly traded company stocks. For instance, they must have at least 100 shareholders, and they can have no more than 50% ownership resting in the hands of five or fewer investors.

The most important (or at least pertinent) rule you need to know about REITs is that they must pay at least 90% of their taxable income to shareholders in the form of dividends. And thanks to this mandate for income, real estate is often one of the highest-yielding stock-market sectors, if not the top source of yield. Thus, much like people enjoy the passive income of physical real estate, many stock investors own REITs for their above-average dividends.

Equity REITs vs. Mortgage REITs

The REIT universe is commonly divided into two distinct flavors: equity REITs and mortgage REITs (mREITs).

While equity REITs and mREITs both deal in real estate, they’re two very different businesses (and pretty dissimilar investments) that can sometimes have very disparate reactions to the same outside forces.

In other words: Investors should know the difference between the two.

Related: The Best REITs to Buy in 2026

Equity REITs: What You Need to Know

“Equity” is shorthand for a few things, among them “ownership,” typically in a financial asset or company. You’ll frequently hear “equities” used as another term for “stocks,” as a company’s stock represents an ownership stake in that business.

Equity REITs, then, are directly invested in real estate assets. They own or manage properties ranging from office buildings to shopping centers to apartment complexes, leasing that space and generating income from the rents.

Publicly traded equity REITs allow you to enjoy that exposure through their shares, which you can purchase through any traditional brokerage account.

Mortgage REITs: What You Need to Know

Mortgage REITs (mREITs) don’t involve themselves in physical real estate. Instead, they deal in “paper” real estate (aka mortgages).

Mortgage REITs finance real estate, operating less like a traditional REIT and more like a financial firm. This is done by either originating mortgages, or buying and selling those mortgages and related mortgage-backed securities. The business also commonly involves borrowing heavily to then trade all that mortgage paper at scale. An mREIT’s profits, then, tend to revolve around net interest income (NII), which is the difference between the interest revenue they generate and the financing costs on all their assets.

This fundamentally makes mortgage REITs riskier than equity REITs. After all, the 2008 financial crisis was caused in large part by financial firms borrowing heavily to invest in the debts of third parties. Particularly in the current interest-rate environment, where borrowing has become quite expensive, that’s a tough spot to be in.

So, why do people buy mREITs? Well, their yields are regularly three to four times more what you’ll get from the average equity REIT. Granted, these dividends might be at risk of evaporating if things go south … but if they hold up, investors will be richly rewarded for looking beyond the conventional players on Wall Street.

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Why Invest in REITs Through ETFs?

concept art of a person standing in front of a wall sized monitor looking at a pie chart representing a breakdown of fund holdings. — DepositPhotos

One of the greatest benefits of any investment fund, including exchange-traded funds, is that it allows you to diversify your portfolio across a multitude of different investments. You could spend a lot of time researching numerous stocks, then pay however much it costs to buy each stock individually … or you could buy a few dozen, hundreds, or even thousands all at once by owning a single ETF.

So, if you don’t want to take the time to research individual REITs, you can put your money into a REIT ETF and leave it up to the portfolio manager or the tracking index.

But real estate investment trusts’ portfolios typically are made up of dozens if not hundreds of properties or thousands of mortgages. So do you really need that additional layer of diversification?

REITs usually focus on specific corners of the market: office buildings, hotels, medical facilities, and so on. Even mortgage REITs tend to specialize in certain segments of real estate assets. If you want that specific exposure, individual REITs are just fine.

But if you prefer to collect real estate income without being tethered to merely one real estate industry, REIT ETFs provide that broad-based access.

The Best REIT ETFs You Can Buy

The following funds are some of the best real estate investment trust ETFs on the market.

I’ve kept screening to a minimum here. All ETFs on this list have a Morningstar Medalist Rating (a forward-looking analytical view of the ETF) of either Bronze, Silver, or Gold, and at least $75 million in assets under management (AUM). I personally love to examine newer funds, but targeting more established ETFs with a certain baseline of assets reduces your risk of purchasing a fund that might eventually close.

Past that, I’m just looking for REITs that come at the sector from different angles. It’s normal to see a sizable amount of overlap in REIT fund holdings—the sector itself only holds a couple hundred stocks across all market capitalizations, after all, and most are going to gravitate toward the largest components. Where the following funds differ is in their strategy and approach.

Best REIT ETF #1: State Street Real Estate Select Sector SPDR ETF

Assets under management: $7.8 billion
Dividend yield: 3.4%
Expense ratio: 0.08%, or 80¢ per year on every $1,000 invested

The Bronze-rated State Street Real Estate Select Sector SPDR ETF (XLRE) isn’t just a mouthful (which it is)—it’s also one of the largest, cheapest, and most straightforward REIT ETFs you can buy.

State Street’s Select Sector funds own only the sector stocks found within the S&P 500, which results in them owning predominantly large- and bigger mid-cap companies. XLRE, for instance, owns 31 real estate investment trusts. That’s not a deep roster, but that’s common for a sector strategy. You’re getting some diversification, however, and you’re getting it across what in theory should be the sector’s most stable and resource-rich stocks.

From an industry perspective, you’re owning REITs positioned in health care, retail, industrial, residential, hotels, offices, and other property types. In fact, that “other” slice—REITs that don’t fall within the traditional property types, designated “specialized REITs”—accounts for a plurality of assets, at 40%.

Like the S&P 500, XLRE is market cap-weighted, which means the larger the stock, the greater the percentage of assets invested in that stock. For instance, top holdings at the moment include medical facility and senior housing REIT Welltower (WELL), logistics specialist Prologis (PLD), datacenter landlord Equinix (EQIX), and communications infrastructure play American Tower (AMT); those four stocks account for roughly a third of the fund’s assets right now.

REITs are frequently the best-paying market sector, and that’s evident in the Real Estate SPDR, whose 3%-plus dividend yield is nearly thrice what you’re getting out of the S&P 500.

This combination of large-cap real estate exposure, yield, and low costs makes XLRE one of the best REIT ETFs you can buy right now.

Best REIT ETF #2: Vanguard Real Estate ETF

a generic office building in sunlight. — DepositPhotos

Assets under management: $37.0 billion*
Dividend yield: 3.9%
Expense ratio: 0.13%, or $1.30 per year on every $1,000 invested

Vanguard Real Estate ETF (VNQ) is the 500-pound gorilla of the U.S. real estate space, boasting well more than three times the assets of the second-largest largest ETF (the Schwab US REIT ETF, not discussed here), and it’s more than four times as large as XLRE.

Normally, I’d point to Vanguard’s low expenses as the reason. But in this case, it’s the longevity. VNQ’s fees, while low compared to the entire field, are still higher than several of its closest competitors. But the fund has had a long time to build up its asset base—VNQ, which got its start in September 2004, is the ETF share class of Vanguard’s Real Estate Index Fund, which has been around since May 1996.

This Silver-rated fund tracks the MSCI US Investable Market Real Estate 25/50 Index, which invests in the real estate stocks of a much wider universe and weights them by market cap.

You won’t see much difference in top holdings—indeed, their top 10 equity holdings are identical, though their weights are somewhat different. However, VNQ’s portfolio of 146 stocks is far wider than XLRE. It also skews smaller than XLRE (though still large overall). Right now, Vanguard Real Estate ETF has a roughly 30/45/25 blend of large-, mid-, and small-cap stocks; State Street’s fund is currently 32/62/6.

The greater access to REITs outside the S&P 500 also currently helps to lift the yield, which sits at almost 4% right now.

* Vanguard fund assets are spread across multiple share classes, including mutual funds and ETFs alike. Assets listed for each fund in this story are for the ETF share class only.

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Best REIT ETF #3: Invesco S&P 500 Equal Weight Real Estate ETF

Assets under management: $96.8 million
Dividend yield: 2.9%
Expense ratio: 0.40%, or $4.00 per year on every $1,000 invested

The Invesco S&P 500 Equal Weight Real Estate ETF (RSPR) holds all of the REITs in the S&P 500 Index, and that might sound mighty familiar. In fact, this REIT ETF would be a true clone of the XLRE if not for its one, significant twist: equal weighting.

Again, XLRE and VNQ distribute their assets based on the size of the company, which results in larger stocks having a greater influence over the fund’s performance. That’s not necessarily a bad thing. Larger companies tend to be more stable. Sometimes, those weighting systems result in still-modest allocations of 1% or 2% for even the largest stocks. And sometimes, the stocks in a sector can perform in lockstep to the point where not even perfectly even weight distribution would make a difference.

But the real estate sector is itself exposed to many different parts of the economy. And at least in the S&P 500, there is a high weighting concentration among the index’s biggest stocks—again, four of the XLRE’s 31 stocks (13%) account for 33% of the weight.

Invesco’s Silver-rated REIT ETF evens the playing board. Every quarter, the fund “rebalances” so that all of its components share the exact same weight. Yes, the weights will change over the next few months as stocks rise and fall, but every three months, the field is brought back to level. This obviously reduces the influence of larger REITs while amplifying the effect of moves in smaller REITs.

What has this meant, practically speaking? RSPR came to life in August 2015; but XLRE’s inception was in October 2015, so we don’t yet have 10-year returns data to work with. But what we do know so far is a mixed bag. The traditional State Street fund has been better over the trailing three- and five-year periods. However, RSPR actually bested XLRE in 2021, 2022, and 2024, and it’s slightly less volatile to boot. Invesco’s fund also has a smaller current yield.

So while Invesco S&P 500 Equal Weight Real Estate ETF certainly deserves a spot among the market’s best REIT ETFs, the decision to buy largely hinges on whether you want even exposure or want to let the sector’s biggest dogs do the most barking.

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Best REIT ETF #4: JPMorgan BetaBuilders MSCI US REIT ETF

a businessman has his hands around a neon blue house signal. — DepositPhotos

Assets under management: $1.1 billion
Dividend yield: 3.0%
Expense ratio: 0.11%, or $1.10 per year on every $1,000 invested

The JPMorgan BetaBuilders MSCI US REIT ETF (BBRE) offers a little more access to smaller REITs than Vanguard’s VNQ, and at a slightly lower cost.

The Bronze-rated BBRE tracks a custom, adjusted market cap-weighted index that emphasizes mid- and small-cap U.S. real estate equities. The 107-component fund allocates only a quarter of its assets to large-cap REITs; the biggest chunk (45%) belongs to mid-caps, and a sizable 30% is in smalls.

The large-cap exposure still comes in big chunks; Welltower and Prologis each enjoy weights of around 10% right now. But we get a little differentiation in the top 10 holdings. Namely, Extra Space Storage (EXR) and digital and paper management facility company Iron Mountain (IRM) don’t make the cut in the two cap-weighted ETFs mentioned prior, but they do in JPMorgan’s ETF.

You’re not getting a higher yield for the extra exposure to smaller stocks—BBRE pays less than XLRE and VNQ right now. But you are getting a better track record. JPMorgan’s BetaBuilders fund has out-returned each of the aforementioned funds over the trailing three and five years. In fact, its performance ranks in the top 20% of all category funds for both periods, putting it among the market’s best REIT ETFs to buy.

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Best REIT ETF #5: JPMorgan Realty Income ETF

Assets under management: $475.5 million
Dividend yield: 2.4%
Expense ratio: 0.50%*, or $5.00 per year on every $1,000 invested

The final REIT ETF on this list, JPMorgan Realty Income ETF (JPRE), is the most expensive by far and offers the lowest yield at just a few basis points north of 2%.

By ratings, however, it’s the best REIT ETF on this list, earning a Gold Medalist Rating from Morningstar. It’s also a solid performer, and most notably, it’s the only one that’s run by humans.

Managers Scott Blasdell, Jason Ko, and Nick Turchetta invest in REITs across the market-cap spectrum, seeking out “superior financial strength, operating revenues and attractive growth potential.” Their portfolio is tight at just 35 holdings, but it provides an even distribution of size, at 37% large caps, 37% mids, and 24% smalls. You’re still getting exposure to numerous REIT types, too, including health care, apartments, industrial, retail, and others.

Many actively managed funds often share a lot of holdings in common with the index benchmarks they’re tasked with beating, but with a few twists. So indeed, while you have big weights in companies such as Welltower and Prologis that feature prominently in the index funds above, you also see outsized weights in the likes of retail REITs Regency Centers (REG) and Agree Realty (ADC).

JPRE’s fee, while the highest on this list, is still competitive compared to the sector, and it’s buying a lot of expertise. Yes, the trio of managers cumulatively have just seven years with the fund (not much!), but they average 23 years of industry experience.

Trailing three- and five-year returns have been plenty respectable, sitting within roughly the top third of all category funds.

* 0.71% gross expense ratio is reduced with a 21-basis-point fee waiver until at least June 30, 2026.

How Do REIT Dividends Work?

a person shuffles through five and hundred dollar bills. — DepositPhotos

Real estate investment trusts pay dividends just like other companies—typically every quarter, though a few REITs are monthly dividend stocks.

The biggest difference between REIT dividends and other stocks’ dividends is that they’re “non-qualified.”

Whether a stock is “qualified” or “non-qualified” is determined by the IRS tax code. I won’t going deeply into the minutiae because it won’t be all that helpful. Instead, as a general guide, just know that most “traditional” stocks (the Apples and Coca-Colas of the world) pay qualified dividends, while most REITs pay non-qualified dividends.

Why does this matter?

Well, qualified dividends are taxed at the lower long-term capital gains tax rate (so, 0%, 15%, or 20%, plus the 3.8% net investment income tax, where applicable). Non-qualified dividends don’t meet the IRS standards for qualification and are taxed at the higher short-term capital gains tax rate (aka your regular income tax rate).

How Do REIT ETFs Pay Investors?

When you own a REIT exchange-traded fund, you own parts of shares of various REITs with different payout schedules. However, you don’t get paid when those stocks pay out—you get paid based on the ETF’s payout schedule.

REIT ETFs pay their investors the same way as REITs do, with deposits appearing on your brokerage statement on a regular cycle. And they typically pay every quarter.

How Else Can You Buy Real Estate?

Typically, if you want to own stock in a real estate company, you have to invest through the public markets. But real estate crowdfunding makes it possible for everyday investors to secure a stake in privately held real estate businesses.

Real estate crowdfunding sites typically allow for small investments (read just hundreds or even tens of dollars) in a wide range of businesses. The platform is usually paid through either a monthly fee or by collecting a percentage of the funds raised for the business. And generally speaking, these platforms provide high ease of use compared to many other types of real estate investments.

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So if you’re looking for a starting point for your own portfolio, look no further. Check out our list of the best long-term stocks for buy-and-hold investors.

Related: 7 Best Vanguard Dividend Funds to Buy in 2026

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5 Top-Ranked ETFs for Real Estate Income

Reviewed by

Hannah Kowalczyk-Harper