Real estate investment trusts (REITs) and real estate mutual funds are similar in the way that they provide liquidity as well as exposure to real estate. Like with mutual funds, REITs are also best when held for the long term.

A few differences between the two investment options:

- Real estate mutual funds offer investors with wider diversification vis-à-vis REITs based on the mutual fund scheme’s investment strategy

- Real estate mutual funds are managed by experts and professional who take all investment decisions

- REITs distribute a significantly higher amount of dividend each year to its shareholders or investors vis-à-vis real estate mutual funds