Final answer:
If a REIT mainly earns revenue from property rental, it is an Equity REIT. This type of REIT owns and earns income from real estate properties. There are also Mortgage and Hybrid REIT options, each with unique investment characteristics.
The correct option is D. equity
Step-by-step explanation:
If you have a Real Estate Investment Trust (REIT) that receives most of its revenue from property rental, the type of REIT you have is an Equity REIT. Equity REITs own and operate income-generating real estate. The majority of their revenue comes directly from the rent they collect on the properties they own, which can include office buildings, shopping malls, apartments, and other types of commercial and residential properties.
There are different types of REITs, namely Equity, Mortgage, and Hybrid REITs. Unlike Equity REITs, Mortgage REITs lend money to real estate owners and operators either directly through mortgages and loans or indirectly through the acquisition of mortgage-backed securities. Hybrid REITs combine the investment strategies of both Equity and Mortgage REITs. By investing in an Equity REIT, investors are afforded the opportunity to own a slice of real estate and earn a share of the income produced through rental income, without having to buy or manage any property themselves.
It is important for investors to understand these differences when choosing which REITs to invest in as they each have unique risk profiles and income sources, which can affect investment returns.
The correct option is D. equity