Best REIT ETFs for 2026 and How to Invest

Here's a closer look at how these two investment vehicles can combine into an easy way to start investing in real estate.

Top five REIT ETFs

These REITs own pools of rental properties or real estate-backed loans that generate rental or interest income. They must distribute at least 90% of their taxable net income to shareholders via dividend payments to remain in compliance with IRS regulations. REITs require less work and capital than buying a property outright. They're also less risky, highly liquid, and have historically delivered strong returns relative to the S&P 500.

However, with almost 200 publicly traded REITs focused on a dozen property sectors, it can be challenging for beginning investors to know where to start. While you could invest in individual REITs, you risk picking the wrong ones that are at risk of underperformance or a dividend cut.

That's where ETFs can help. These entities hold several REITs and other real estate stocks, giving investors broad exposure to the sector and helping reduce risk. Some of the top real estate ETF options are:

3. Schwab US REIT ETF

This ETF provides simple access to REITs, holding only REITs, unlike other ETFs that include non-REIT real estate stocks. The fund held 120 REITs as of early 2026, led by the following five:

1. Welltower: 9.4%.
2. Prologis: 9.1%. 
3. Equinix: 5.1%. 
4. Simon Property: 4.8%
5. Realty Income: 4.8%

Like many other REIT ETFs, the Schwab fund holds REITs based on their market cap instead of using an equal weighting system, so its top holdings are almost identical to those of most other top REIT ETFs. Meanwhile, its top 10 make up about 50% of its portfolio.   

Its expense ratio stands out. It's an ultra-low 0.07%, allowing investors to keep more of the returns from the underlying REITs. That includes its lucrative dividend income (a 3.0% yield over the last 12 months).

4. State Street Real Estate Select Sector SPDR ETF

The State Street Real Estate Select Sector SPDR ETF enables investors to target the largest REITs. The ETF holds only real estate stocks in the S&P 500, limiting its investment universe. As of early 2026, the ETF held only about 30 stocks, led by some familiar names:

1. Welltower: 10.2%.
2. Prologis: 9.6%.
3. Equinix: 6.3%.
4. American Tower: 6.1%.
5. Simon Property: 4.9%.

As five of the largest REITs, it's no surprise to see this group leading the way. And because this ETF concentrates on real estate stocks in the S&P 500, its top 10 holdings accounted for roughly 60% of its portfolio. That makes it an ideal option for investors seeking to focus on the largest REITs.

The ETF has a low expense ratio of 0.08%. Consequently, it's a solid option for investors seeking low-cost exposure to the biggest REITs. The fund pays attractive dividends, which drives the REIT ETF's roughly 3.3% dividend yield (on a trailing 12-month basis).

5. iShares Select U.S. REIT ETF

The iShares Select U.S. REIT ETF is another REIT ETF managed by BlackRock. It takes a slightly different approach to investing in REITs, focusing on large real estate companies that dominate their respective property categories. As a result, it has a concentrated portfolio of 30 REITs.

However, these 30 include some familiar names, led by:

1. Prologis: 8.5%
2. Welltower: 8.1%
3. Equinix: 7.9%
4. American Tower: 7.5%
5. Simon Property Group: 6.2

Overall, its top 10 holdings made up more than 60% of its portfolio as of early 2026.

Because the ETF takes a more active approach to REIT investing, it charges a relatively high expense ratio of 0.32%. It also offered a lower dividend yield (2.9% on a trailing 12-month basis). It's best for investors who want to focus on the dominant REITs without limiting themselves to only those in the S&P 500. 

How to invest in REIT ETFs

1. Open your brokerage app: Log in to your brokerage account where you handle your investments.
2. Search for the ETF: Enter the ticker or company name into the search bar to bring up the ETF's trading page.
3. Decide how many shares to buy: Consider your investment goals and how much of your portfolio you want to allocate to this ETF.
4. Select order type: Choose between a market order to buy at the current price or a limit order to specify the maximum price you're willing to pay.
5. Submit your order: Confirm the details and submit your buy order.
6. Review your purchase: Check your portfolio to ensure your order was filled as expected and adjust your investment strategy accordingly.

How REIT ETFs work

REIT ETFs work by pooling investor capital to invest broadly across REIT sectors. Many REIT ETFs track a common REIT index by investing in the REITs held by that index to match its returns. Other ETFs take a more active approach, investing in REITs that their management teams believe will deliver the highest returns.

REIT ETFs own equity in the REITs, entitling them to any capital appreciation and dividend income. Most REIT ETFs distribute dividends to investors each quarter.

Benefits and drawbacks of investing in REIT ETFs

Investing in REIT ETFs has its share of pros and cons. Some of the benefits include:

• Diversification: They offer broad diversification across the entire REIT sector, which can help lower your portfolio's risk.
• Income: REITs pay dividends, which REIT ETFs distribute to investors each quarter.
• Capital appreciation potential: REITs can deliver price appreciation as they grow their portfolios, earnings, and dividends.

On the other hand, REIT ETFs have some cons, such as:

• Underperformance potential: REIT ETFs can underperform the share prices of the top REITs.
• Costs: REIT ETFs charge investors a management fee (expense ratio), which can eat into returns.

What to Consider Before Investing in REIT ETFs

Here are some key factors investors should evaluate when choosing REIT ETFs:

• Whether you want to invest in a REIT ETF that passively tracks a REIT index or is a more actively managed fund.
• Its expense ratio versus other funds.
• The ETF's historical track record.
• Its size compared to other REIT ETFs.

These ETFs make it easy to invest in REITs

REITs have historically generated attractive total returns for investors by providing them with above-average dividend income and price appreciation. With so many great REITs to choose from, it can be hard for investors to determine which are best for their portfolio. That's where REIT ETFs can help. They make it easy to invest in the sector by providing broad exposure to the leading REITs. Although most REIT ETFs have similar top holdings, the best ones offer unique spins, giving investors several excellent options.

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