What is security?

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Real estate securities offer high dividend yields and special tax considerations.


In real estate, a security can come in a form of a certificate, document, or instrument that represents a title to or interest in a property. Generally, it is used as a means to invest in firms that own properties, such as apartments, office buildings, residential units, shopping malls, etc.

One type of real estate security is the real estate investment trust (REIT), which is mostly used when investing through a property or a mortgage and is often traded on major exchanges. Typically, REITs will provide you with extremely liquid stakes in real estate. Also, they often offer high dividend yields when traded, while receiving special tax considerations. That is why many people use them as security when investing in property.

Other common forms of real estate security are:

  • Stocks in Companies That Own Real Estate Projects
  • Bonds for Particular Projects
  • Equity REITs
  • Syndicated Tenancy in Common Investments (TICs)

In the US, all states allow real estate securities to be offered to financial institutions, given that they are registered or are legally exempted from registration. Also, securities are still defined by law as certain types of debt, which means that laws governing debts would also apply to real estate security.

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