Does Robinhood Have REITs? (What You Need To Know)

REITs (Real Estate Investment Trusts) are – at the most basic level – companies that purchase property on behalf of their shareholders and investors. While REITs have been around for more than 60 years, they are really starting to see an explosion in popularity right now.

Robinhood, one of the most popular platforms for buying and selling stocks today, is a huge hit with individual investors right now as well. Lots of new investors are looking for ways to diversify their holdings, but many of them are disappointed to learn that Robinhood no longer supports REITs.

In the rest of this detailed guide, we run through the ins and outs of why Robinhood has turned its back on REITs, what you need to know about investing in these kinds of assets, and how you might go about doing so outside of the Robinhood “ecosystem”.

Does Robinhood Have REITs?

No, as of right now (middle 2022) Robinhood does not support the investment in REITs.

That’s probably going to come as a surprise to a lot of Robinhood users – especially those that used to leverage the platform prior to January 2021.

Up until January 2021 REITs were fully supported on Robinhood. Not only that, they were also pretty heavily promoted – not just on the platform, but in the Robinhood blog as well.

In early 2021, though, Robinhood made a number of changes to the types of securities that they were going to offer to their users.

An announcement was made on the Robinhood website (and the Robinhood app), letting users no that they would no longer be able to purchase “closed end funds”, join limited partnerships, get into royalty trusts, purchase tracking stocks, or invest in New York registry shares or units.

At the same time, though, anyone that had already purchased those kinds of assets and securities were going to be able to keep them within their Robinhood portfolio. They’d also be free to sell those assets anytime they like using the Robinhood tools.

It’s just that new purchases – whether individual users had purchased REITs in the past – would be 100% band from the platform as of January 11, 2021.

Option trading on these kinds of assets was also eliminated completely.

Why Has Robinhood Moved Away from REITs?

Robinhood never really came out and explained expressly why they were moving away from allowing REITs on the platform, but there’s been quite a bit of speculation online.

Some people believe that Robinhood has decided to move in a different direction for fear of litigation that might come about if investors didn’t realize they were purchasing taxable assets that they would be responsible for.

As we mentioned earlier, REITs function very similarly to stocks in a lot of respects but have some pretty significant differences.

One of the biggest differences, of course, is that the REITs themselves pay no corporate tax – but individual shareholders and investors are responsible for paying taxes on the dividends that they receive.

Tons of newbies to the investing world like to download the Robinhood app and jump right in with both feet.

These kinds of investors may have been excited about the idea of investing in real estate without spending a lot of money initially, only to discover later down the line that the REITs they decided to jump into cause them to be responsible for a hefty tax bill.

Of course, this is just speculation. We want to reemphasize that Robinhood themselves have never come out and explained exactly why they decided to get rid of this asset class completely.

These are just a lot of individual puzzle pieces that folks have put together independently.

Are REITs Still a Good Buy?

Just because Robinhood has decided to move away from REITs doesn’t mean that these assets are no longer valuable or no longer something you can use to generate a tremendous amount of wealth.

Nothing could be further from the truth.

REITs still have the power to help you transform your financial future, enjoying the kind of financial freedom that few people ever get a chance to taste.

Yes, these assets can be a little bit tricky to get into (and to get out of) if you aren’t a long-term investor. They require a different kind of investment approach and a different kind of strategy.

All that said, there’s a reason why so many people love to leverage the power of REITs Especially when it comes to passive income.

If that’s something that interests you, be sure that you have a look at these kinds of assets even if it means going outside of the Robinhood ecosystem to jump right in.

Where to Invest in REITs

If you are serious about investing in REITs, you’re probably going to have two leave the Robinhood ecosystem for this asset class specifically.

That doesn’t mean that you have to give up on Robinhood altogether. Not at all.

It just means you’re going to need a separate investment platform for REITs exclusively.

You’re in luck, though – there’s a fantastic option that deals exclusively in REITs that’s well worth close consideration, more research, and due diligence from you.

We, of course, are talking about Fundrise! (Earn $25 worth of shares when you sign up- it is an affiliate link so I will earn as well.)

Maybe the “granddaddy of them all” when it comes to REIT investing applications, Fundrise is universally praised by newbie investors and seasoned veterans alike. You can get started with as little as $500, snapping up REITs today – this minute – when you sign up for a Fundrise account.

This is something worth checking out.

Closing Thoughts

Robinhood used to allow anybody to jump into REITs without a lot of strings attached, kind of the same way that they opened the world of stock investing (later crypto).

That all changed in early 2021, though.

New protocols were put in place. New rules and regulations were established. And Robinhood themselves announced that these kinds of investments just weren’t going to be available on the Robinhood platform going forward.

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If you’re serious about getting into REITs, you’ll need to look elsewhere.

Take a look at our other most recent blog posts below:

Does Robinhood Have REITs? (What You Need To Know)