UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                  SCHEDULE 14A

           PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
                      EXCHANGE ACT OF 1934 (AMENDMENT NO. )

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                    NEUBERGER BERMAN REALTY INCOME FUND INC.
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Chairman's Letter



Dear Shareholder,

I am pleased to present to you this annual report for Neuberger Berman Realty
Income Fund Inc. for the fiscal year ended October 31, 2007. The report includes
portfolio commentary, a listing of the Fund's investments, and its audited
financial statements for the reporting period. In addition, I am taking this
opportunity to highlight several significant initiatives taken by the Fund's
Board of Directors during the fiscal year.

o    In the first half of calendar 2007, the Fund amended its application for
     exemptive relief from the Securities and Exchange Commission to allow it to
     implement a "managed distribution plan." This plan would permit the Fund to
     distribute long-term capital gains to shareholders more frequently than is
     otherwise permitted by law. The Board believes that a managed distribution
     plan may help the Fund attract new investors, support the market price of
     its common stock, and help narrow the discount at which the Fund's common
     stock trades.

o    In April 2007, the Board authorized an increase in the amount of the Fund's
     monthly distribution to $0.203325 per share from $0.1125, effective with
     the May distribution.

o    In October 2007, the Board approved a proposal to merge the Fund into the
     Neuberger Berman Real Estate Securities Income Fund Inc. (AMEX: NRO),
     pending shareholder approval. If approved, the transaction will result in
     one of the largest domestic real estate closed-end funds and should
     eliminate confusion in the market place. The Board believes that the larger
     merged fund may provide shareholders benefits such as enhanced liquidity
     and increased leverage. Although there can be no assurances, the Board also
     believes that the transaction could have the positive effect of narrowing
     the discount from net asset value at which the Fund's common stock trades.

These actions are consistent with the Board's proactive posture--one focused on
continually seeking actions that it believes are in the best interests of the
Fund's shareholders.

Thank you for your confidence in Neuberger Berman. We will continue to do our
best to earn it.

Sincerely,

/s/ Peter Sundman

Peter Sundman
Chairman of the Board
Neuberger Berman Realty Income Fund Inc.