What do "direct investments" in REITs involve?

Direct investments in REITs involve the act of putting money directly into the real estate investment trusts' properties and operations. This means that the investor is not just purchasing shares or relying on intermediaries; instead, they are directly affecting the underlying assets that the REIT manages. This can include funding specific real estate projects, whether commercial or residential, which allows for a more hands-on approach to real estate investing.

Direct investment signifies a commitment to the actual physical assets that the REIT owns, positioning investors as stakeholders in the performance of the properties generating income. This involvement often leads to potential for greater returns, as the profitability of the REIT is closely tied to the success of its property portfolio and operations.

In contrast, the other options suggest alternative methods or limitations around the concept of investing in REITs, but do not capture the essence of what direct investments entail.