Investing in REITs: Review (2026)

Almost everything else in this library is about buying buildings yourself. Ralph Block's book is about the alternative — owning real estate through publicly traded companies — and it is the standard reference for a reason.

Block ran REIT portfolios professionally for decades. The book is written for an investor who understands stocks and wants to understand why real estate companies do not behave like other stocks.

Snapshot	Details
Author	Ralph L. Block
First published	1998; multiple revised editions
Subject	Publicly traded real estate investment trusts
Best for	Investors comparing REITs against direct ownership
Prerequisite	Basic comfort reading a financial statement

The metric that makes REITs different

The most useful thing in the book is also the simplest: earnings per share is close to meaningless for a REIT.

Real estate companies carry enormous depreciation charges. Under accounting rules, a building depreciates every year — but a well-maintained, well-located building generally does not lose value, and often gains it. So GAAP net income systematically understates what a REIT actually earned.

The industry's answer is funds from operations: net income with real estate depreciation added back and property sale gains removed. Adjusted FFO goes further, subtracting recurring capital expenditure and straight-line rent adjustments to get closer to distributable cash. Block explains all of this clearly, including why AFFO is the harder and better number and why companies prefer to report FFO.

If you take one thing from the book, take this. It is the difference between reading a REIT's results and being misled by them.

What else it covers well

The structure and why it exists. A REIT must distribute the large majority of its taxable income to shareholders, which is why yields are high and why REITs must issue equity or debt to grow rather than retaining earnings. That single constraint explains most REIT behaviour.

Sector differences. Apartments, retail, office, industrial, healthcare, self-storage and specialty sectors have genuinely different demand drivers, lease lengths and cyclicality. Block treats them separately, which most general investing books do not.

Balance sheet quality. Debt maturity schedules, fixed versus floating exposure, and the fact that a REIT with good properties and bad debt timing is a bad investment. This chapter reads well after 2022–2024.

Management quality and conflicts. Internally versus externally managed structures, and why the latter has historically produced more conflicts of interest.

Where the book is dated

The sector mix has shifted dramatically. Office is the obvious one — the structural demand change after 2020 is outside any edition's frame. Meanwhile data centres, cell towers and industrial logistics have become enormous REIT sectors on the back of trends the earlier editions treat as minor.

Tax treatment moved. The Section 199A deduction introduced by the 2017 tax law allows a deduction against qualified REIT dividends for many taxpayers, materially changing after-tax comparisons. Not in older editions.

Interest rate sensitivity got a live demonstration. The book explains the relationship in principle; 2022–2024 supplied a case study more vivid than anything in the text.

Ralph Block died in 2015. Later editions were revised by others, and the book is no longer being updated by its author. Check which edition you are buying.

The comparison the book does not make

For a direct investor, the real question is not "how do I analyse a REIT" but "should I own buildings or shares." Block does not answer that, so it is worth stating plainly.

REITs give you liquidity, diversification, professional management and no tenants. Direct ownership gives you leverage on terms no public company can access, depreciation against your own income, control over the asset, and the ability to buy something mispriced because it is small and local. Those are genuinely different propositions, and the tax treatment differs enough that they are not really competing for the same dollar.

The investors who benefit most from this book are usually the ones holding both.

Who should read it

• Direct investors who want real estate exposure in a retirement account, where direct ownership is awkward.
• Anyone who holds REITs and has been valuing them on P/E ratios.
• Investors thinking about sector concentration — if you own three apartment buildings, an apartment REIT is not diversification.

Who should skip it

• If you only want to buy houses. The overlap is conceptual, not practical.
• If you do not read financial statements. The book assumes you will.
• If you want current sector calls. It is a framework, not a market view, and the sector landscape has moved.

What to read next

• Real Estate Finance & Investments: Risks and Opportunities — Linneman on public and private real estate capital markets together.
• What Every Real Estate Investor Needs to Know About Cash Flow — the direct-ownership equivalent of the FFO discipline.
• REIT income ladder — applying the sector chapters to build an actual income portfolio, and why payout ratios matter more than headline yield.
• Delaware statutory trusts as 1031 replacement — the middle path between shares and buildings.

Final take

The standard reference on REITs, and worth reading for the FFO and AFFO chapters even if you never buy one — the discipline of distrusting a headline earnings number transfers directly to reading a syndication's projections. Buy the most recent edition available, and supplement the sector chapters with something written after office demand changed.

This review is part of the best real estate investing books library — 40+ titles ranked by the decision in front of you.