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

                           FORM 10-KSB

    Annual Report Under Section 13 or 15(d) of The Securities
                        Exchange Act of 1934

          For the Fiscal Year Ended:  December 31, 2005

                Commission file number:  0-18289

         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
         (Name of small business issuer in its charter)

        State of Minnesota                41-1622463
  (State or other jurisdiction of      (I.R.S. Employer
   incorporation or organization)     Identification No.)

      30 East 7th Street, Suite 1300, St. Paul, Minnesota 55101
               (Address of principal executive offices)

                          (651) 227-7333
                   (Issuer's telephone number)

Securities registered under Section 12(b) of the Exchange Act:
                                 Name of each exchange on
     Title of each class             which registered
             None                          None

Securities registered under Section 12(g) of the Exchange Act:

                      Limited Partnership Units
                        (Title of class)

Check whether the issuer is not required to file reports pursuant
to Section 13 or 15(d) of the Exchange Act.

Check  whether  the issuer (1) filed all reports required  to  be
filed by Section 13 or 15(d) of the Exchange Act during the  past
12  months  (or  for such shorter period that the registrant  was
required to file such reports), and (2) has been subject to  such
filing requirements for the past 90 days.       Yes [X]    No

Check if disclosure of delinquent filers in response to Rule  405
of  Regulation  S-B  is  not  contained  in  this  Form,  and  no
disclosure  will  be  contained,  to  the  best  of  registrant's
knowledge,   in   definitive  proxy  or  information   statements
incorporated by reference in Part III of this Form 10-KSB or  any
amendment to this Form 10-KSB. [X]

Indicate by check mark whether the registrant is a shell  company
(as defined in Rule 12b-2 of the Exchange Act).  Yes    No [X]

The Issuer's revenues for the year ended December 31, 2005 were
$1,132,209.

As  of  February 28, 2006, there were 19,078.13 Units of  limited
partnership  interest outstanding and owned by  nonaffiliates  of
the  registrant, which Units had an aggregate market value (based
solely  on  the price at which they were sold since there  is  no
ready market for such Units) of $19,078,130.

               DOCUMENTS INCORPORATED BY REFERENCE
 The registrant has not incorporated any documents by reference
                        into this report.

Transitional Small Business Disclosure Format:     Yes   No [X]
                             PART I

ITEM 1.   DESCRIPTION OF BUSINESS.

        AEI  Real  Estate  Fund  XVIII Limited  Partnership  (the
"Partnership" or the "Registrant") is a limited partnership which
was  organized pursuant to the laws of the State of Minnesota  on
September  20,  1988.  The registrant is comprised  of  AEI  Fund
Management XVIII, Inc. (AFM) as Managing General Partner,  Robert
P.  Johnson,  the  President and sole director  of  AFM,  as  the
Individual  General Partner, and purchasers of partnership  units
as  Limited  Partners.  The Partnership offered for  sale  up  to
$30,000,000  of  limited  partnership  interests  (the   "Units")
(30,000  Units  at  $1,000 per Unit) pursuant to  a  registration
statement  effective December 5, 1988.  The Partnership commenced
operations  on  February 15, 1989 when minimum  subscriptions  of
1,500 Limited Partnership Units ($1,500,000) were accepted.   The
Partnership's  offering  terminated December  4,  1990  when  the
extended  offering  period  expired.   The  Partnership  received
subscriptions    for   22,783.05   Limited   Partnership    Units
($22,783,050).

        The Partnership was organized to acquire, initially on  a
debt-free   basis,  existing  and  newly  constructed  commercial
properties located in the United States and Canada, to lease such
properties  to  tenants under triple net  leases,  to  hold  such
properties   and  to  eventually  sell  such  properties.    From
subscription  proceeds,  the  Partnership  purchased   twenty-one
properties,  including  partial  interests  in  five  properties,
totaling  $18,868,379.  The balance of the subscription  proceeds
was  applied  to  organization  and  syndication  costs,  working
capital reserves and distributions, which represented a return of
capital.   The  properties  are  all  commercial,  single  tenant
buildings leased under triple net leases.

       The Partnership will hold its properties until the General
Partners  determine  that the sale or other  disposition  of  the
properties   is   advantageous  in  view  of  the   Partnership's
investment  objectives.  In deciding whether to sell  properties,
the  General  Partners will consider factors  such  as  potential
appreciation,  net  cash flow and income tax considerations.   In
addition,  certain  tenants may be granted  options  to  purchase
properties  after  a  specified portion of  the  lease  term  has
elapsed.   Prior  to  2005,  the Partnership  sold  some  of  its
properties  and  reinvested  the  proceeds  from  such  sales  in
additional  properties.  It is anticipated that  the  Partnership
will  sell its remaining properties within the next two to  three
years,  although final liquidation may be delayed by a number  of
circumstances,  including market conditions and seller  financing
of properties.

Leases

       Although there are variations in the specific terms of the
leases,  the following is a summary of the general terms  of  the
Partnership's  leases.   The properties  are  leased  to  various
tenants  under  triple  net  leases,  which  are  classified   as
operating  leases.   Under  a triple net  lease,  the  tenant  is
responsible  for  all real estate taxes, insurance,  maintenance,
repairs  and  operating expenses for the property.   The  primary
lease terms are for 15 to 20 years.  The leases provide for  base
annual  rental  payments,  payable in monthly  installments,  and
contain  rent  clauses which entitle the Partnership  to  receive
additional rent in future years based on stated rent increases or
if  gross  receipts  for  the property exceed  certain  specified
amounts, among other conditions.
ITEM 1.   DESCRIPTION OF BUSINESS.  (Continued)

        The  leases provide the tenant with two to four five-year
renewal options subject to the same terms and conditions  as  the
primary  term.   Certain  tenants have been  granted  options  to
purchase  the property at a formula price.  The option  price  is
stated  to  be the greater of the price determined by the  stated
formula  or the fair market value of the property as agreed  upon
by  the  parties or determined based on appraisals.  The  formula
price is the original purchase price of the property increased by
a specified percentage per year, compounded annually.  The actual
sale  price  of  a  property to a tenant may or  may  not  exceed
original cost depending on market and other conditions.

Property Activity

        Through March 31, 2003, the Partnership sold 99.2394%  of
the  Fuddruckers  restaurant, in eight separate transactions,  to
unrelated third parties.  The Partnership received total net sale
proceeds of $1,989,027, which resulted in a net gain of $771,290.
The  cost  and related accumulated depreciation of the  interests
sold  was  $1,395,078 and $177,341, respectively.  For the  years
ended  December 31, 2003 and 2002, the net gain was $286,861  and
$484,429, respectively.

       During the first quarter of 2003, the Partnership sold the
Children's  World  daycare center in Phoenix,  Arizona,  in  four
separate   transactions,  to  unrelated   third   parties.    The
Partnership received total net sale proceeds of $1,592,169, which
resulted  in  a  net gain of $1,016,152.  The  cost  and  related
accumulated  depreciation of the interests sold was $883,486  and
$307,469, respectively.

        During  the second quarter of 2003, the Partnership  sold
its  23.95% interest in the Champps Americana restaurant in Troy,
Michigan,  in  six  separate  transactions,  to  unrelated  third
parties.   The  Partnership received total net sale  proceeds  of
$1,657,062, which resulted in a net gain of $594,177.   The  cost
and  related accumulated depreciation of the interests  sold  was
$1,192,496 and $129,611, respectively.

        On May 15, 2003, the Partnership sold its 40% interest in
the Tumbleweed restaurant in Columbus, Ohio to an unrelated third
party.   The Partnership received net sale proceeds of  $704,001,
which  resulted in a net gain of $201,568.  At the time of  sale,
the  cost  and related accumulated depreciation was $554,269  and
$51,836, respectively.

       During the first nine months of 2003, the Partnership sold
its   38%  interest  in  the  Champps  Americana  restaurant   in
Centerville,  Ohio, in nine separate transactions,  to  unrelated
third  parties.  The Partnership received total net sale proceeds
of  $2,126,740,  which resulted in a net gain of  $740,621.   The
cost  and related accumulated depreciation of the interests  sold
was $1,502,252 and $116,133, respectively.

       In October 2003, the Partnership entered into an agreement
to  sell  the Cheddar's restaurant in Clive, Iowa to an unrelated
third  party.   On  January 6, 2004, the  sale  closed  with  the
Partnership  receiving  net sale proceeds  of  $2,131,025,  which
resulted  in a net gain of $1,223,369.  At the time of sale,  the
cost  and  related  accumulated depreciation was  $1,392,249  and
$484,593, respectively.


ITEM 1.   DESCRIPTION OF BUSINESS.  (Continued)

       On April 3, 2003, the Partnership purchased a 50% interest
in  a  parcel  of  land in Mansfield, Texas  for  $383,000.   The
Partnership  obtained  title  to the  land  in  the  form  of  an
undivided fee simple interest in the 50% interest purchased.  The
land is leased to Kona Restaurant Group, Inc. (KRG) under a Lease
Agreement  with  a  primary term of 17 years  and  annual  rental
payments  of  $38,300.  Simultaneously with the purchase  of  the
land,  the  Partnership  entered  into  a  Development  Financing
Agreement under which the Partnership advanced funds to  KRG  for
the  construction of a Johnny Carino's restaurant  on  the  site.
Pursuant  to the Lease, any improvements to the land  during  the
term  of  the  Lease  become the property  of  the  lessor.   The
Partnership  charged interest on the advances at a rate  of  10%.
On  September  3, 2003, after the development was completed,  the
Lease Agreement was amended to require annual rental payments  of
$103,250.   The Partnership's share of the total purchase  price,
including  the  cost of the land, was $1,028,886.  The  remaining
interest  in  the property was purchased by AEI Real Estate  Fund
XVII Limited Partnership, an affiliate of the Partnership.

       During the third quarter of 2005, the Partnership sold its
50%  interest  in  the Johnny Carino's restaurant  in  Mansfield,
Texas,  in  three  separate  transactions,  to  unrelated   third
parties.   The  Partnership received total net sale  proceeds  of
$1,490,853, which resulted in a net gain of $506,543.   The  cost
and  related accumulated depreciation of the interests  sold  was
$1,028,886 and $44,576, respectively.

        On  August  27,  2003, the Partnership  purchased  a  24%
interest  in a Garden Ridge retail store in Woodlands, Texas  for
$1,995,850.  The property is leased to Garden Ridge, L.P. under a
Lease Agreement with a primary term of 20 years and annual rental
payments  of  $226,209.  The remaining interests in the  property
were   purchased  by  AEI  Income  &  Growth  Fund  XXII  Limited
Partnership, AEI Income & Growth Fund 24 LLC and AEI Real  Estate
Fund XV Limited Partnership, affiliates of the Partnership.

        In  February  2004,  Garden Ridge, L.P.  (GR)  filed  for
Chapter  11  bankruptcy reorganization.  In  press  releases,  GR
reported rejecting the leases of 9 of 44 stores and that  it  was
attempting to renegotiate lease terms for its other stores.   The
Woodlands  store  was not identified as one of  the  nine  to  be
closed.  GR entered into negotiations with the property owners of
the  Woodlands  store to arrive at an agreement to modify  rental
terms that would induce GR to affirm the Lease for this property.
GR  and  the  property  owners subsequently  agreed  to  a  lease
amendment  to  reduce the annual rent by 23%,  with  a  10%  rent
increase on January 1, 2008.  The Partnership's share of the  new
rental amount is $175,968.  The amendment provides for additional
rental  payments  if  the  store's sales  exceed  certain  stated
amounts.   The amendment also calls for the owners to waive  rent
for   one  month  during  the  first  six  months  following  the
bankruptcy  court's approval of GR's affirmation  of  the  Lease.
With  the exception of February 2004, GR made all rental payments
due under its original lease.

       On April 28, 2005, the bankruptcy court approved GR's Plan
of  Reorganization.   As  part of the Plan,  the  lease  for  the
Woodlands store was affirmed by GR and the lease amendment became
effective.  Pursuant to the amendment, GR selected July  2005  as
the one month to have rent waived.  In May 2005, GR paid the rent
due  for  February  2004 and, pursuant to the amendment,  GR  was
entitled  to  credit an equal amount against any  installment  of
rent  due  in the future.  GR applied the credit for the February
rent  against rent due for August and September 2005.  As of  the
date  of  this  report, GR has complied with all Lease  terms  as
amended.


ITEM 1.   DESCRIPTION OF BUSINESS.  (Continued)

        On  February  5,  2004, the Partnership purchased  a  50%
interest  in  a  Jared  Jewelry store in Lakewood,  Colorado  for
$2,017,633.   The  property is leased to Sterling  Jewelers  Inc.
under  a  Lease  Agreement with a primary term of  20  years  and
annual  rental payments of $155,219.  The remaining  interest  in
the  property was purchased by AEI Net Lease Income & Growth Fund
XIX Limited Partnership, an affiliate of the Partnership.

        On  April  30,  2004,  the Partnership  purchased  a  50%
interest   in  an  Applebee's  restaurant  in  Stow,   Ohio   for
$1,575,755.   The property is leased to Apple Ohio  LLC  under  a
Lease Agreement with a primary term of 20 years and annual rental
payments of $120,043.  The remaining interest in the property was
purchased  by  AEI  Net Lease Income & Growth  Fund  XIX  Limited
Partnership.

       In October 2005, the Partnership entered into an agreement
to  sell its interest in the Applebee's restaurant in Stow,  Ohio
to  an  unrelated third party.  On November 15,  2005,  the  sale
closed  with  the  Partnership receiving  net  sale  proceeds  of
$1,835,784,  which resulted in a net gain of  $310,234.   At  the
time  of sale, the cost and related accumulated depreciation  was
$1,575,755 and $50,205, respectively.

        On May 10, 2004, the Partnership purchased a 50% interest
in  an Eckerd drug store in Auburn, New York for $2,287,133.  The
property  is leased to Eckerd Corporation under a Lease Agreement
with  a  primary term of 20 years and annual rental  payments  of
$184,753.   The remaining interest in the property was  purchased
by AEI Net Lease Income & Growth Fund XIX Limited Partnership

        In  July  2003, the tenant of the Razzoo's restaurant  in
Alpharetta,  Georgia  notified  the  Partnership  that   it   was
experiencing  financial  difficulty  stemming  from  lower   than
expected sales and that it might not be able to pay future rents.
In  late 2003, the tenant closed the restaurant and said that  it
no  longer  intended to operate a restaurant at  the  site.   The
Partnership  and the tenant entered into an agreement,  effective
November 1, 2004, to terminate the lease and return possession of
the  property to the Partnership.  Rents were current through the
date  of  termination.  As part of the agreement, the Partnership
was  reimbursed for certain expenses it incurred related to legal
action  it  pursued  in  connection  with  this  situation.   The
Partnership  listed  the property for sale  with  a  real  estate
broker  in  the Alpharetta area.  While the property was  vacant,
the  Partnership was responsible for real estate taxes and  other
costs required to maintain the property.

       Based on an analysis of market conditions in the area, the
Partnership  determined the property was impaired  in  accordance
with  the  requirements  of  Statement  of  Financial  Accounting
Standards  No. 144, Accounting for the Impairment or Disposal  of
Long-Lived Assets.  As a result, in the fourth quarter of 2003, a
charge  to discontinued operations for real estate impairment  of
$252,399  was  recognized, which was the difference  between  the
book  value  at  December 31, 2003 of $852,399 and the  estimated
fair value of $600,000.  The charge was recorded against the cost
of  the land, building and equipment.  At December 31, 2004,  the
property was classified as Real Estate Held for Sale.

ITEM 1.   DESCRIPTION OF BUSINESS.  (Continued)

         In  December  2004,  the  Partnership  entered  into  an
agreement  to  sell the property in Alpharetta  to  an  unrelated
third  party.   On  March  29, 2005, the  sale  closed  with  the
Partnership  receiving  net  sale  proceeds  of  $648,425,  which
resulted in a net gain of $48,425.

       On May 31, 2005, the Partnership sold its 5.8291% interest
in  the  Applebee's restaurant in Destin, Florida to the  tenant.
The  Partnership  received net sale proceeds of  $109,804,  which
resulted  in  a  net  gain  of $62,281.   The  cost  and  related
accumulated  depreciation of the interest sold  was  $65,215  and
$17,692,  respectively.  At December 31, 2004, the  property  was
classified  as  Real Estate Held for Sale with a  book  value  of
$47,523.

        On October 18, 2005, the Partnership sold the Old Country
Buffet  restaurant in Northlake, Illinois to an  unrelated  third
party.  The Partnership received net sale proceeds of $1,973,839,
which  resulted in a net gain of $851,215.  At the time of  sale,
the  cost and related accumulated depreciation was $1,350,804 and
$228,180, respectively.

        In May 2003, the Partnership entered into an agreement to
sell  a  Taco  Cabana  restaurant in San Antonio,  Texas  to  the
tenant.   The agreement was extended several times to enable  the
tenant  to  complete their due diligence and certain negotiations
with   adjacent  land  owners.   During  this  time,  the  tenant
continued  to  pay rent and complied with the lease  obligations.
Subsequent  to  December  31, 2005,  the  sale  closed  with  the
Partnership   receiving  net  sale  proceeds   of   approximately
$1,640,000,  which  resulted  in  a  net  gain  of  approximately
$482,300.   At the time of sale, the cost and related accumulated
depreciation  was  $1,406,426  and  $248,772,  respectively.   At
December 31, 2005 and 2004, the property was classified  as  Real
Estate Held for Sale with a book value of $1,157,654.

Major Tenants

        During 2005, three tenants each contributed more than ten
percent  of  the Partnership's total rental revenue.   The  major
tenants  in aggregate contributed 59% of total rental revenue  in
2005.   It  is  anticipated that, based  on  the  minimum  rental
payments  required  under  the leases,  each  major  tenant  will
continue  to  contribute more than ten percent  of  total  rental
revenue  in  2006 and future years.  However, the tenant  of  the
Taco Cabana restaurants will not continue to be a major tenant as
one  of  the restaurants was sold in 2006.  Any failure of  these
major  tenants  could  materially affect  the  Partnership's  net
income and cash distributions.

Competition

        The  Partnership is a minor factor in the commercial real
estate  business.   There are numerous entities  engaged  in  the
commercial  real  estate  business which have  greater  financial
resources  than  the  Partnership.  At the time  the  Partnership
elects to dispose of its properties, the Partnership will  be  in
competition  with other persons and entities to find  buyers  for
its properties.

Employees

        The  Partnership  has  no direct  employees.   Management
services   are  performed  for  the  Partnership  by   AEI   Fund
Management, Inc., an affiliate of AFM.

ITEM 2.   DESCRIPTION OF PROPERTIES.

Investment Objectives

        The  Partnership's investment objectives were to  acquire
existing or newly-developed commercial properties throughout  the
United  States  and  Canada  that offer  the  potential  for  (i)
preservation  and protection of the Partnership's  capital;  (ii)
partially  tax-deferred cash distributions from operations  which
may  increase through rent participation clauses or mandated rent
increases; and (iii) long-term capital gains through appreciation
in value of the Partnership's properties realized upon sale.  The
Partnership  does not have a policy, and there is no  limitation,
as  to the amount or percentage of assets that may be invested in
any  one  property.  However, to the extent possible, the General
Partners  attempt  to  diversify the type  and  location  of  the
Partnership's properties.

Description of Properties

       The Partnership's properties are commercial, single tenant
buildings.  The properties were acquired on a debt-free basis and
are  leased to various tenants under triple net leases, which are
classified  as  operating  leases.   The  Partnership  holds   an
undivided  fee simple interest in the properties.   At  any  time
prior to selling the properties, the Partnership may mortgage one
or  more  of its properties in amounts not exceeding 50%  of  the
aggregate purchase price of all Partnership properties.

        The  Partnership's properties are subject to the  general
competitive conditions incident to the ownership of single tenant
investment  real estate.  Since each property is leased  under  a
long-term   lease,   there  is  little  competition   until   the
Partnership  decides to sell the property.   At  this  time,  the
Partnership will be competing with other real estate  owners,  on
both a national and local level, in attempting to find buyers for
the   properties.   In  the  event  of  a  tenant  default,   the
Partnership would be competing with other real estate owners, who
have  property vacancies, to attract a new tenant  to  lease  the
property.   The Partnership's tenants operate in industries  that
are  very  competitive and can be affected  by  factors  such  as
changes  in regional or local economies, seasonality and  changes
in consumer preference.

        The  following table is a summary of the properties  that
the Partnership acquired and owned as of December 31, 2005.

                           Total Property                Annual    Annual
                  Purchase  Acquisition                  Lease     Rent Per
Property            Date       Costs      Tenant         Payment   Sq. Ft.

Children's World                        KinderCare
Daycare Center                           Learning
 Blue Springs, MO  6/27/90  $  791,271 Centers, Inc.     $112,340  $14.04

Children's World                        KinderCare
Daycare Center                           Learning
 Lenexa, KS        9/13/90  $  983,527 Centers, Inc.     $140,691  $17.55

Taco Cabana Restaurant                 Texas Taco
 San Antonio, TX  12/29/90  $1,406,426 Cabana L.P.       $253,072  $92.43

ITEM 2.DESCRIPTION OF PROPERTIES.  (Continued)

                           Total Property                Annual    Annual
                  Purchase  Acquisition                  Lease     Rent Per
Property            Date       Costs      Tenant         Payment   Sq. Ft.

Children's World                         KinderCare
Daycare Center                            Learning
 Westerville, OH   6/21/91  $  990,261  Centers, Inc.    $142,494  $17.86

Taco Cabana Restaurant
 San Antonio, TX                         Texas Taco
 (9.3699%)         7/19/91  $  107,933   Cabana L.P.     $ 19,698  $46.98

Children's World                         KinderCare
Daycare Center                            Learning
 Columbus, OH      8/10/92  $1,019,202  Centers, Inc.    $139,793  $15.83

Tractor Supply
 Company Store
 Bristol, VA                           Tractor Supply
 (7.5158%)         4/10/96  $   96,765  Company, Inc.    $ 12,018  $ 8.53

Champps Americana
 Restaurant                               Champps
 Columbus, OH                            Operating
 (.5061%)          8/29/96  $   12,984  Corporation      $  1,747  $42.25

Fuddruckers Restaurant
 Thornton, CO
 (.7606%)          7/30/97  $   10,693 Fuddruckers, Inc. $  1,291  $34.10

Tumbleweed Restaurant
 Chillicothe, OH                         Tumbleweed,
 (43.9634%)       11/20/98  $  560,612      Inc.         $ 64,319  $26.68

Garden Ridge
 Retail Store
 Woodlands, TX                         Garden Ridge,
 (24%)             8/27/03  $1,995,850     L.P.          $175,968  $ 6.57

Jared Jewelry Store
 Lakewood, CO                             Sterling
 (50%)              2/5/04  $2,017,633 Jewelers Inc.     $155,219  $50.86

Eckerd Drug Store
 Auburn, NY                               Eckerd
 (50%)             5/10/04  $2,287,133 Corporation       $184,753  $26.75


ITEM 2.DESCRIPTION OF PROPERTIES.  (Continued)

        The  properties  listed above with  a  partial  ownership
percentage  are  owned with affiliates of the Partnership  and/or
unrelated  third  parties.   The  remaining  interests   in   the
Tumbleweed restaurant are owned by AEI Net Lease Income &  Growth
Fund  XIX Limited Partnership and an unrelated third party.   The
remaining interests in the Garden Ridge retail store are owned by
AEI  Income & Growth Fund XXII Limited Partnership, AEI Income  &
Growth  Fund  24 LLC and unrelated third parties.  The  remaining
interest in the Jared Jewelry store and the Eckerd drug store are
owned  by  AEI  Net  Lease  Income  &  Growth  Fund  XIX  Limited
Partnership.   The  remaining  interests  in  the   Taco   Cabana
restaurant  in  San  Antonio, Texas, the Tractor  Supply  Company
store,  the  Fuddruckers  restaurant and  the  Champps  Americana
restaurant are owned by unrelated third parties.

        The Partnership accounts for properties owned as tenants-
in-common  with  affiliated Partnerships and/or  unrelated  third
parties  using  the  proportionate  consolidation  method.   Each
tenant-in-common  owns  a  separate, undivided  interest  in  the
properties.   Any  tenant-in-common that holds more  than  a  50%
interest  does  not control decisions over the  other  tenant-in-
common  interests.   The financial statements reflect  only  this
Partnership's percentage share of the properties' land,  building
and equipment, liabilities, revenues and expenses.

        At  the  time the properties were acquired, the remaining
primary  Lease  terms  varied from 15 to 20  years.   The  Leases
provide  the  tenants with two to four five-year renewal  options
subject to the same terms and conditions as the primary term.

       Pursuant to the Lease Agreements, the tenants are required
to provide proof of adequate insurance coverage on the properties
they  occupy.   The General Partners believe the  properties  are
adequately covered by insurance and consider the properties to be
well-maintained and sufficient for the Partnership's operations.

         For  tax  purposes,  the  Partnership's  properties  are
depreciated  under the Modified Accelerated Cost Recovery  System
(MACRS).  The largest depreciable component of a property is  the
building  which  is depreciated, using the straight-line  method,
over  31.5  years or 39 years depending on the date when  it  was
placed  in  service.  The remaining depreciable components  of  a
property  are personal property and land improvements  which  are
depreciated,  using an accelerated method, over 5 and  15  years,
respectively.  Since the Partnership has tax-exempt Partners, the
Partnership is subject to the rules of Section 168(h)(6)  of  the
Internal  Revenue  Code  which  requires  a  percentage  of   the
properties' depreciable components to be depreciated over  longer
lives  using  the straight-line method.  In general, the  federal
tax  basis of the properties for tax depreciation purposes is the
same as the basis for book depreciation purposes.

        Through  December 31, 2005, all properties  listed  above
were 100% occupied.

ITEM 3. LEGAL PROCEEDINGS.

       None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

       None.
                             PART II

ITEM 5. MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS
       AND SMALL BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES.

        (a) As of December 31, 2005, there were 1,375 holders  of
record  of the registrant's Limited Partnership Units.  There  is
no  other  class  of  security outstanding  or  authorized.   The
registrant's  Units  are  not a traded security  in  any  market.
During the period covered by this report, the Partnership did not
sell  any  equity  securities that are not registered  under  the
Securities Act of 1933.

       Cash distributions of $67,723 and $17,438 were made to the
General Partners and $6,704,595 and $1,726,371 were made  to  the
Limited   Partners   in   2005  and  2004,   respectively.    The
distributions  were made on a quarterly basis and  represent  Net
Cash   Flow,  as  defined,  except  as  discussed  below.   These
distributions  should  not be compared  with  dividends  paid  on
capital stock by corporations.

        As  part  of the Limited Partner distributions  discussed
above,  the  Partnership distributed $5,418,667 and  $401,222  of
proceeds from property sales in 2005 and 2004, respectively.  The
distributions  reduced  the  Limited Partners'  Adjusted  Capital
Contributions.

       (b) Not applicable.

        (c) Pursuant to Section 7.7 of the Partnership Agreement,
as  amended, each Limited Partner has the right to present  Units
to  the  Partnership  for purchase by submitting  notice  to  the
Managing  General Partner.  The purchase price of  the  Units  is
equal to 90% of the net asset value of the Units as determined by
the Managing General Partner in accordance with the provisions of
the Partnership Agreement.  Units tendered to the Partnership are
redeemed  at  the purchase price established for the  quarter  in
which the Partnership received a notice at least 60 days prior to
the  repurchase  dates of January 1st, April 1st,  July  1st  and
October   1st   subject  to  the  following   limitations.    The
Partnership is not obligated to purchase in any year more than 5%
of  the number of Units outstanding at the beginning of the year.
In  no event shall the Partnership be obligated to purchase Units
if,  in the sole discretion of the Managing General Partner, such
purchase   would   impair  the  capital  or  operation   of   the
Partnership.

ITEM 5.  MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS
       AND SMALL BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES.

      Small Business Issuer Purchases of Equity Securities
                                                              Maximum Number
                                        Total Number of Units of Units that
                Total Number   Average  Purchased as Part of  May Yet Be
                  of Units   Price Paid Publicly Announced    Purchased Under
   Period        Purchased    per Unit  Plans or Programs the Plans or Programs

10/1/05 to 10/31/05   75       $814.00      3,699.92(1)              (2)

11/1/05 to 11/30/05   --         --             --                   --

12/1/05 to 12/31/05   --         --             --                   --

 (1) The  Partnership's  repurchase plan is  mandated  by  the
     Partnership Agreement as included in the prospectus related to
     the original offering of the Units.
 (2) The Partnership Agreement contains annual limitations on
     repurchases described in the paragraph above and has no
     expiration date.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS.

        The Management's Discussion and Analysis contains various
"forward  looking  statements"  within  the  meaning  of  federal
securities  laws  which  represent management's  expectations  or
beliefs  concerning future events, including statements regarding
anticipated  application of cash, expected  returns  from  rental
income,  growth  in revenue, taxation levels, the sufficiency  of
cash to meet operating expenses, rates of distribution, and other
matters.  These, and other forward looking statements made by the
Partnership,  must be evaluated in the context  of  a  number  of
factors that may affect the Partnership's financial condition and
results of operations, including the following:

   Market  and  economic conditions which affect the  value
   of  the  properties the Partnership owns and  the  cash
   from rental income such properties generate;

   the  federal  income tax consequences of rental  income,
   deductions,  gain  on  sales and other  items  and  the
   affects of these consequences for the Partners;

   resolution  by  the General Partners of  conflicts  with
   which they may be confronted;

   the   success   of  the  General  Partners   of   locating
   properties with favorable risk return characteristics;

   the effect of tenant defaults; and

   the  condition of the industries in which the  tenants  of
   properties owned by the Partnership operate.


ITEM 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS.  (Continued)

The Application of Critical Accounting Policies

        The preparation of the Partnership's financial statements
requires  management to make estimates and assumptions  that  may
affect the reported amounts of assets, liabilities, revenues  and
expenses,  and  related  disclosure  of  contingent  assets   and
liabilities. Management evaluates these estimates on  an  ongoing
basis,  including  those related to the carrying  value  of  real
estate  and  the  allocation  by AEI  Fund  Management,  Inc.  of
expenses  to  the  Partnership as opposed  to  other  funds  they
manage.

        The Partnership purchases properties and records them  in
the  financial  statements  at the lower  of  cost  or  estimated
realizable   value.   The  Partnership  initially   records   the
properties  at cost (including capitalized acquisition expenses).
The Partnership is required to periodically evaluate the carrying
value  of properties to determine whether their realizable  value
has  declined.   For  properties the Partnership  will  hold  and
operate, management determines whether impairment has occurred by
comparing the property's probability-weighted cash flows  to  its
current carrying value.  For properties held for sale, management
determines  whether  impairment has  occurred  by  comparing  the
property's estimated fair value less cost to sell to its  current
carrying  value.   If  the carrying value  is  greater  than  the
realizable  value, an impairment loss is recorded to  reduce  the
carrying value of the property to its realizable value.  A change
in  these assumptions or analysis could cause material changes in
the carrying value of the properties.

        AEI  Fund Management, Inc. allocates expenses to each  of
the  funds  they manage primarily on the basis of the  number  of
hours  devoted  by their employees to each fund's affairs.   They
also  allocate  expenses at the end of each month  that  are  not
directly related to a fund's operations based upon the number  of
investors  in the fund and the fund's capitalization relative  to
other  funds  they  manage.   The  Partnership  reimburses  these
expenses  subject  to  detailed  limitations  contained  in   the
Partnership Agreement.

         Management   of  the  Partnership  has   discussed   the
development  and selection of the above accounting estimates  and
the management discussion and analysis disclosures regarding them
with the managing partner of the Partnership.

Results of Operations

        For  the  years  ended December 31, 2005  and  2004,  the
Partnership  recognized rental income from continuing  operations
of  $1,132,209  and $1,066,815, respectively.   In  2005,  rental
income  increased  due  to  additional  rent  received  from  two
property  acquisitions  in  2004  and  rent  increases  on   four
properties.  These increases were partially offset by a reduction
in rent from the Garden Ridge property as discussed below.

ITEM 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS.  (Continued)

        For  the  years  ended December 31, 2005  and  2004,  the
Partnership  incurred  Partnership administration  expenses  from
affiliated parties of $187,923 and $209,245, respectively.  These
administration  expenses  include  costs  associated   with   the
management of the properties, processing distributions, reporting
requirements and correspondence to the Limited Partners.   During
the   same   periods,   the  Partnership   incurred   Partnership
administration  and property management expenses  from  unrelated
parties  of  $29,234 and $27,151, respectively.   These  expenses
represent  direct payments to third parties for legal and  filing
fees,  direct  administrative costs, outside audit costs,  taxes,
insurance and other property costs.

        In February 2004, Garden Ridge, L.P. (GR), the tenant  of
the  Garden  Ridge  retail store in Woodlands, Texas,  filed  for
Chapter  11  bankruptcy reorganization.  In  press  releases,  GR
reported rejecting the leases of 9 of 44 stores and that  it  was
attempting to renegotiate lease terms for its other stores.   The
Woodlands  store  was not identified as one of  the  nine  to  be
closed.  GR entered into negotiations with the property owners of
the  Woodlands  store to arrive at an agreement to modify  rental
terms that would induce GR to affirm the Lease for this property.
GR  and  the  property  owners subsequently  agreed  to  a  lease
amendment  to  reduce the annual rent by 23%,  with  a  10%  rent
increase on January 1, 2008.  The Partnership's share of the  new
rental amount is $175,968.  The amendment provides for additional
rental  payments  if  the  store's sales  exceed  certain  stated
amounts.   The amendment also calls for the owners to waive  rent
for   one  month  during  the  first  six  months  following  the
bankruptcy  court's approval of GR's affirmation  of  the  Lease.
With  the exception of February 2004, GR made all rental payments
due under its original lease.

       On April 28, 2005, the bankruptcy court approved GR's Plan
of  Reorganization.   As  part of the Plan,  the  lease  for  the
Woodlands store was affirmed by GR and the lease amendment became
effective.  Pursuant to the amendment, GR selected July  2005  as
the one month to have rent waived.  In May 2005, GR paid the rent
due  for  February  2004 and, pursuant to the amendment,  GR  was
entitled  to  credit an equal amount against any  installment  of
rent  due  in the future.  GR applied the credit for the February
rent  against rent due for August and September 2005.  As of  the
date  of  this  report, GR has complied with all Lease  terms  as
amended.

        For  the  years  ended December 31, 2005  and  2004,  the
Partnership  recognized interest income of $56,244  and  $27,804,
respectively.   In  2005, interest income increased  due  to  the
Partnership having more money invested in a money market  account
due to property sales and higher money market interest rates.

        In  accordance  with  Statement of  Financial  Accounting
Standards  No. 144, Accounting for the Impairment or Disposal  of
Long-Lived  Assets,  upon  complete disposal  of  a  property  or
classification of a property as Real Estate Held  for  Sale,  the
Partnership  includes  the operating  results  and  sale  of  the
property   in   discontinued  operations.    In   addition,   the
Partnership reclassifies the prior periods operating results  and
any  partial  sales  of the property to discontinued  operations.
For  the year ended December 31, 2005, the Partnership recognized
income  from  discontinued operations of $2,254,091, representing
rental  income less property management expenses and depreciation
of  $475,393  and gain on disposal of real estate of  $1,778,698.
For  the year ended December 31, 2004, the Partnership recognized
income  from  discontinued operations of $1,800,476, representing
rental  income less property management expenses and depreciation
of $577,107 and gain on disposal of real estate of $1,223,369.


ITEM 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS.  (Continued)

       In October 2003, the Partnership entered into an agreement
to  sell  the Cheddar's restaurant in Clive, Iowa to an unrelated
third  party.   On  January 6, 2004, the  sale  closed  with  the
Partnership  receiving  net sale proceeds  of  $2,131,025,  which
resulted  in a net gain of $1,223,369.  At the time of sale,  the
cost  and  related  accumulated depreciation was  $1,392,249  and
$484,593, respectively.

        In  July  2003, the tenant of the Razzoo's restaurant  in
Alpharetta,  Georgia  notified  the  Partnership  that   it   was
experiencing  financial  difficulty  stemming  from  lower   than
expected sales and that it might not be able to pay future rents.
In  late 2003, the tenant closed the restaurant and said that  it
no  longer  intended to operate a restaurant at  the  site.   The
Partnership  and the tenant entered into an agreement,  effective
November 1, 2004, to terminate the lease and return possession of
the  property to the Partnership.  Rents were current through the
date  of  termination.  As part of the agreement, the Partnership
was  reimbursed for certain expenses it incurred related to legal
action  it  pursued in connection with this situation.  Following
an  analysis  of the tenant's business at this location  and  its
financial condition, and its intent to no longer operate at  this
site,  the Partnership determined that the best course of  action
was to negotiate a settlement with the tenant and take possession
of   the   property.   With  possession  of  the  property,   the
Partnership  could  move forward with selling  the  property  and
reinvesting  the  proceeds from the sale in  replacement  income-
producing property.  The Partnership listed the property for sale
with  a  real  estate broker in the Alpharetta area.   While  the
property  was  vacant, the Partnership was responsible  for  real
estate taxes and other costs required to maintain the property.

       Based on an analysis of market conditions in the area, the
Partnership  determined the property was impaired  in  accordance
with  the  requirements  of  Statement  of  Financial  Accounting
Standards  No. 144, Accounting for the Impairment or Disposal  of
Long-Lived Assets.  As a result, in the fourth quarter of 2003, a
charge  to discontinued operations for real estate impairment  of
$252,399  was  recognized, which was the difference  between  the
book  value  at  December 31, 2003 of $852,399 and the  estimated
fair value of $600,000.  The charge was recorded against the cost
of  the land, building and equipment.  At December 31, 2004,  the
property was classified as Real Estate Held for Sale.

         In  December  2004,  the  Partnership  entered  into  an
agreement  to  sell the property in Alpharetta  to  an  unrelated
third  party.   On  March  29, 2005, the  sale  closed  with  the
Partnership  receiving  net  sale  proceeds  of  $648,425,  which
resulted in a net gain of $48,425.

       On May 31, 2005, the Partnership sold its 5.8291% interest
in  the  Applebee's restaurant in Destin, Florida to the  tenant.
The  Partnership  received net sale proceeds of  $109,804,  which
resulted  in  a  net  gain  of $62,281.   The  cost  and  related
accumulated  depreciation of the interest sold  was  $65,215  and
$17,692,  respectively.  At December 31, 2004, the  property  was
classified  as  Real Estate Held for Sale with a  book  value  of
$47,523.

       During the third quarter of 2005, the Partnership sold its
50%  interest  in  the Johnny Carino's restaurant  in  Mansfield,
Texas,  in  three  separate  transactions,  to  unrelated   third
parties.   The  Partnership received total net sale  proceeds  of
$1,490,853, which resulted in a net gain of $506,543.   The  cost
and  related accumulated depreciation of the interests  sold  was
$1,028,886 and $44,576, respectively.
ITEM 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS.  (Continued)

        On October 18, 2005, the Partnership sold the Old Country
Buffet  restaurant in Northlake, Illinois to an  unrelated  third
party.  The Partnership received net sale proceeds of $1,973,839,
which  resulted in a net gain of $851,215.  At the time of  sale,
the  cost and related accumulated depreciation was $1,350,804 and
$228,180, respectively.

       In October 2005, the Partnership entered into an agreement
to  sell its interest in the Applebee's restaurant in Stow,  Ohio
to  an  unrelated third party.  On November 15,  2005,  the  sale
closed  with  the  Partnership receiving  net  sale  proceeds  of
$1,835,784,  which resulted in a net gain of  $310,234.   At  the
time  of sale, the cost and related accumulated depreciation  was
$1,575,755 and $50,205, respectively.

        In May 2003, the Partnership entered into an agreement to
sell  a  Taco  Cabana  restaurant in San Antonio,  Texas  to  the
tenant.   The agreement was extended several times to enable  the
tenant  to  complete their due diligence and certain negotiations
with   adjacent  land  owners.   During  this  time,  the  tenant
continued  to  pay rent and complied with the lease  obligations.
Subsequent  to  December  31, 2005,  the  sale  closed  with  the
Partnership   receiving  net  sale  proceeds   of   approximately
$1,640,000,  which  resulted  in  a  net  gain  of  approximately
$482,300.   At the time of sale, the cost and related accumulated
depreciation  was  $1,406,426  and  $248,772,  respectively.   At
December 31, 2005 and 2004, the property was classified  as  Real
Estate Held for Sale with a book value of $1,157,654.

        In the second quarter of 2005, the Partnership decided to
discontinue the reinvestment of proceeds from property  sales  in
additional  properties.   As a result, the  Partnership's  rental
income  and operating income will decrease in the future  as  the
Partnership sells its remaining properties.

        Inflation  has  had  a  minimal  effect  on  income  from
operations.   Leases  may contain rent increases,  based  on  the
increase  in  the  Consumer Price Index over a specified  period,
which  will result in an increase in rental income over the  term
of  the  leases.   In addition, leases may contain  rent  clauses
which  entitle  the  Partnership to receive  additional  rent  in
future  years  if gross receipts for the property exceed  certain
specified  amounts.  Increases in sales volumes of  the  tenants,
due to inflation and real sales growth, may result in an increase
in rental income over the term of the leases.  Inflation also may
cause the real estate to appreciate in value.  However, inflation
and  changing prices may have an adverse impact on the  operating
margins  of  the  properties' tenants, which could  impair  their
ability  to  pay rent and subsequently reduce the Net  Cash  Flow
available for distributions.

Liquidity and Capital Resources

       During the year ended December 31, 2005, the Partnership's
cash  balances increased $3,584,805 as a result of cash generated
from  the  sale  of  property,  which  was  partially  offset  by
distributions  paid to the Partners in excess of  cash  generated
from  operating activities.  During the year ended  December  31,
2004, the Partnership's cash balances decreased $4,654,211  as  a
result  of cash used to purchase property and distributions  paid
to  the  Partners  in  excess of cash  generated  from  operating
activities,  which were partially offset by cash  generated  from
the sale of property.

ITEM 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS.  (Continued)

        Net  cash provided by operating activities increased from
$1,525,877  in  2004  to $1,585,538 in 2005  as  a  result  of  a
decrease  in  Partnership administration and property  management
expenses in 2005 and net timing differences in the collection  of
payments from the tenants and the payment of expenses, which were
partially  offset  by  a decrease in total  rental  and  interest
income in 2005.

        The  major components of the Partnership's cash flow from
investing activities are investments in real estate and  proceeds
from  the  sale of real estate.  During the years ended  December
31,  2005 and 2004, the Partnership generated cash flow from  the
sale  of  real estate of $6,058,705 and $2,131,025, respectively.
During the year ended December 31, 2004, the Partnership expended
$5,880,521 to invest in real properties (inclusive of acquisition
expenses)  as  the  Partnership reinvested  cash  generated  from
property sales in 2004 and 2003.

        On  February  5,  2004, the Partnership purchased  a  50%
interest  in  a  Jared  Jewelry store in Lakewood,  Colorado  for
$2,017,633.   The  property is leased to Sterling  Jewelers  Inc.
under  a  Lease  Agreement with a primary term of  20  years  and
annual  rental payments of $155,219.  The remaining  interest  in
the  property was purchased by AEI Net Lease Income & Growth Fund
XIX Limited Partnership, an affiliate of the Partnership.

        On  April  30,  2004,  the Partnership  purchased  a  50%
interest   in  an  Applebee's  restaurant  in  Stow,   Ohio   for
$1,575,755.   The property is leased to Apple Ohio  LLC  under  a
Lease Agreement with a primary term of 20 years and annual rental
payments of $120,043.  The remaining interest in the property was
purchased  by  AEI  Net Lease Income & Growth  Fund  XIX  Limited
Partnership.

        On May 10, 2004, the Partnership purchased a 50% interest
in  an Eckerd drug store in Auburn, New York for $2,287,133.  The
property  is leased to Eckerd Corporation under a Lease Agreement
with  a  primary term of 20 years and annual rental  payments  of
$184,753.   The remaining interest in the property was  purchased
by AEI Net Lease Income & Growth Fund XIX Limited Partnership.

        The  Partnership's primary use of cash flow,  other  than
investment   in  real  estate,  is  distribution  and  redemption
payments  to  Partners.   The Partnership  declares  its  regular
quarterly distributions before the end of each quarter  and  pays
the distribution in the first week after the end of each quarter.
The  Partnership attempts to maintain a stable distribution  rate
from  quarter  to  quarter.   Redemption  payments  are  paid  to
redeeming Partners on a quarterly basis.

        For  the  years  ended December 31, 2005  and  2004,  the
Partnership  declared distributions of $6,772,318 and $1,743,809,
respectively, which were distributed 99% to the Limited  Partners
and  1%  to the General Partners.  The Limited Partners  received
distributions  of  $6,704,595  and  $1,726,371  and  the  General
Partners  received distributions of $67,723 and $17,438  for  the
periods,   respectively.   In  December  2004,  the   Partnership
declared a special distribution of $303,030 of net sale proceeds.
In  June,  September and December 2005, the Partnership  declared
special  distributions  of $505,051, $1,515,152  and  $3,282,828,
respectively,  of  net sale proceeds, which  resulted  in  higher
distributions  in  2005  and  a higher  distribution  payable  at
December 31, 2005.

ITEM 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS.  (Continued)

         During   2005  and  2004,  the  Partnership  distributed
$5,473,401  and $405,275, respectively, of net sale  proceeds  to
the  Limited  and  General Partners as part  of  their  quarterly
distributions, which represented a return of capital  of  $283.44
and $20.71 per Limited Partnership Unit, respectively.

        The  Partnership may acquire Units from Limited  Partners
who have tendered their Units to the Partnership.  Such Units may
be  acquired at a discount.  The Partnership is not obligated  to
purchase  in  any  year  more than 5%  of  the  number  of  Units
outstanding at the beginning of the year.  In no event shall  the
Partnership  be  obligated to purchase  Units  if,  in  the  sole
discretion  of the Managing General Partner, such purchase  would
impair the capital or operation of the Partnership.

        During  2005,  28 Limited Partners redeemed  a  total  of
261.25  Partnership  Units for $229,573 in  accordance  with  the
Partnership Agreement.  During 2004, 21 Limited Partners redeemed
a total of 178.2 Partnership Units for $157,691.  The Partnership
acquired  these  Units using Net Cash Flow from  operations.   In
prior  years,  a total of 245 Limited Partners redeemed  3,260.47
Partnership  Units for $2,700,638.  The redemptions increase  the
remaining   Limited   Partners'   ownership   interest   in   the
Partnership.   As  a  result  of these  redemption  payments  and
pursuant  to  the  Partnership Agreement,  the  General  Partners
received  distributions of $2,319 and $1,593 in  2005  and  2004,
respectively.

       The continuing rent payments from the properties, together
with  cash  generated from property sales, should be adequate  to
fund   continuing   distributions  and  meet  other   Partnership
obligations on both a short-term and long-term basis.

ITEM 7.   FINANCIAL STATEMENTS.

       See accompanying index to financial statements.





         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP

                  INDEX TO FINANCIAL STATEMENTS






Report of Independent Registered Public Accounting Firm

Balance Sheet as of December 31, 2005 and 2004

Statements for the Years Ended December 31, 2005 and 2004:

     Income

     Cash Flows

     Changes in Partners' Capital

Notes to Financial Statements





     REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM




To the Partners:
AEI Real Estate Fund XVIII Limited Partnership
St. Paul, Minnesota




      We  have audited the accompanying balance sheet of AEI Real
Estate  Fund  XVIII  Limited  Partnership  (a  Minnesota  limited
partnership)  as of December 31, 2005 and 2004, and  the  related
statements of income, cash flows and changes in partners' capital
for  the  years then ended.  These financial statements  are  the
responsibility    of   the   Partnership's    management.     Our
responsibility  is  to  express an  opinion  on  these  financial
statements based on our audits.

      We conducted our audits in accordance with the standards of
the  Public  Company Accounting Oversight Board (United  States).
Those  standards require that we plan and perform  the  audit  to
obtain   reasonable   assurance  about  whether   the   financial
statements are free of material misstatement.  An audit  includes
examining,  on a test basis, evidence supporting the amounts  and
disclosures in the financial statements.  An audit also  includes
assessing   the   accounting  principles  used  and   significant
estimates  made by management, as well as evaluating the  overall
financial  statement presentation.  We believe  that  our  audits
provide a reasonable basis for our opinion.

      In  our opinion, the financial statements referred to above
present  fairly, in all material respects, the financial position
of  AEI Real Estate Fund XVIII Limited Partnership as of December
31,  2005 and 2004 and the results of its operations and its cash
flows for the years then ended, in conformity with U.S. generally
accepted accounting principles.




                       /s/ Boulay, Heutmaker, Zibell & Co. P.L.L.P.
                                Certified Public Accountants

Minneapolis, Minnesota
January 27, 2006

<PAGE>
         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                          BALANCE SHEET
                           DECEMBER 31

                             ASSETS
                                                     2005          2004
CURRENT ASSETS:
  Cash and Cash Equivalents                      $ 4,707,199    $ 1,122,394
  Receivables                                              0         44,454
                                                  -----------    -----------
      Total Current Assets                         4,707,199      1,166,848
                                                  -----------    -----------
INVESTMENTS IN REAL ESTATE:
  Land                                             3,426,142      4,661,701
  Buildings and Equipment                          7,447,722     10,167,608
  Accumulated Depreciation                        (1,993,893)    (2,009,390)
                                                  -----------    -----------
                                                   8,879,971     12,819,919
  Real Estate Held for Sale                        1,157,654      1,805,177
                                                  -----------    -----------
      Net Investments in Real Estate              10,037,625     14,625,096
                                                  -----------    -----------
           Total  Assets                         $14,744,824    $15,791,944
                                                  ===========    ===========

                         LIABILITIES AND PARTNERS' CAPITAL

CURRENT LIABILITIES:
  Payable to AEI Fund Management, Inc.           $    56,555    $    49,770
  Distributions Payable                            3,614,814        670,042
  Unearned Rent                                       44,717         21,041
                                                  -----------    -----------
      Total Current Liabilities                    3,716,086        740,853
                                                  -----------    -----------
PARTNERS' CAPITAL:
  General Partners                                    17,543         33,588
  Limited Partners, $1,000 per Unit;
   30,000 Units authorized; 22,783 Issued;
   19,083 and 19,344 Units outstanding in
   2005 and 2004, respectively                    11,011,195     15,017,503
                                                  -----------    -----------
      Total Partners' Capital                     11,028,738     15,051,091
                                                  -----------    -----------
        Total Liabilities and Partners' Capital  $14,744,824    $15,791,944
                                                  ===========    ===========

 The accompanying Notes to Financial Statements are an integral
                     part of this statement.
</PAGE>
         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                       STATEMENT OF INCOME
                 FOR THE YEARS ENDED DECEMBER 3l


                                                      2005          2004

RENTAL INCOME                                     $ 1,132,209   $ 1,066,815

EXPENSES:
  Partnership Administration - Affiliates             187,923       209,245
  Partnership Administration and Property
     Management - Unrelated Parties                    29,234        27,151
  Depreciation                                        243,530       221,860
                                                   -----------   -----------
      Total Expenses                                  460,687       458,256
                                                   -----------   -----------

OPERATING INCOME                                      671,522       608,559

OTHER INCOME:
  Interest Income                                      56,244        27,804
                                                   -----------   -----------

INCOME FROM CONTINUING OPERATIONS                     727,766       636,363

Income from Discontinued Operations                 2,254,091     1,800,476
                                                   -----------   -----------
NET INCOME                                        $ 2,981,857   $ 2,436,839
                                                   ===========   ===========
NET INCOME ALLOCATED:
  General Partners                                $    53,997   $    24,368
  Limited Partners                                  2,927,860     2,412,471
                                                   -----------   -----------
                                                  $ 2,981,857   $ 2,436,839
                                                   ===========   ===========
INCOME PER LIMITED PARTNERSHIP UNIT:
   Continuing Operations                          $     37.58   $     32.48
   Discontinued Operations                             115.12         91.89
                                                   -----------   -----------
         Total                                    $    152.70   $    124.37
                                                   ===========   ===========
Weighted Average Units Outstanding                     19,174        19,398
                                                   ===========   ===========

 The accompanying Notes to Financial Statements are an integral
                     part of this statement.
</PAGE>
         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                     STATEMENT OF CASH FLOWS
                 FOR THE YEARS ENDED DECEMBER 3l

                                                        2005         2004

CASH FLOWS FROM OPERATING ACTIVITIES:
  Net Income                                       $ 2,981,857   $ 2,436,839

  Adjustments To Reconcile Net Income
 To Net Cash Provided By Operating Activities:
      Depreciation                                     307,464       304,434
      Gain on Sale of Real Estate                   (1,778,698)   (1,223,369)
      (Increase) Decrease in Receivables                44,454       (44,454)
      Increase in Payable to
        AEI Fund Management, Inc.                        6,785        31,386
      Increase in Unearned Rent                         23,676        21,041
                                                    -----------   -----------
         Total Adjustments                          (1,396,319)     (910,962)
                                                    -----------   -----------
       Net Cash Provided By
           Operating Activities                      1,585,538     1,525,877
                                                    -----------   -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Investments in Real Estate                                 0    (5,880,521)
  Proceeds from Sale of Real Estate                  6,058,705     2,131,025
                                                    -----------   -----------
       Net Cash Provided By (Used For)
           Investing Activities                      6,058,705    (3,749,496)
                                                    -----------   -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
    Increase  (Decrease) in Distributions Payable    2,944,772      (527,499)
    Distributions to Partners                       (6,772,318)   (1,743,809)
    Redemption Payments                               (231,892)     (159,284)
                                                    -----------   -----------
       Net Cash Used For
        Financing Activities                        (4,059,438)   (2,430,592)
                                                    -----------   -----------
NET INCREASE (DECREASE) IN CASH
    AND CASH EQUIVALENTS                             3,584,805    (4,654,211)

CASH AND CASH EQUIVALENTS, beginning of period       1,122,394     5,776,605
                                                    -----------   -----------
CASH AND CASH EQUIVALENTS, end of period           $ 4,707,199   $ 1,122,394
                                                    ===========   ===========

 The accompanying Notes to Financial Statements are an integral
                     part of this statement.
</PAGE>
<PAGE>
         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
            STATEMENT OF CHANGES IN PARTNERS' CAPITAL
                 FOR THE YEARS ENDED DECEMBER 3l


                                                                Limited
                                                              Partnership
                            General    Limited                   Units
                            Partners   Partners      Total     Outstanding


BALANCE, December 31, 2003 $ 28,251  $14,489,094  $14,517,345   19,522.58

  Distributions             (17,438)  (1,726,371)  (1,743,809)

  Redemption Payments        (1,593)    (157,691)    (159,284)    (178.20)

  Net Income                 24,368    2,412,471    2,436,839
                            --------  -----------  ----------- -----------
BALANCE, December 31, 2004   33,588   15,017,503   15,051,091   19,344.38

  Distributions             (67,723)  (6,704,595)  (6,772,318)

  Redemption Payments        (2,319)    (229,573)    (231,892)    (261.25)

  Net Income                 53,997    2,927,860    2,981,857
                            --------  -----------  ----------- -----------
BALANCE, December 31, 2005 $ 17,543  $11,011,195  $11,028,738   19,083.13
                            ========  ===========  =========== ===========

 The accompanying Notes to Financial Statements are an integral
                     part of this statement.
</PAGE>
<PAGE>
         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                  NOTES TO FINANCIAL STATEMENTS
                   DECEMBER 31, 2005 AND 2004

(1)  Organization -

     AEI Real Estate Fund XVIII Limited Partnership (Partnership)
     was  formed  to  acquire and lease commercial properties  to
     operating tenants.  The Partnership's operations are managed
     by  AEI  Fund  Management XVIII, Inc.  (AFM),  the  Managing
     General Partner.  Robert P. Johnson, the President and  sole
     director  of AFM, serves as the Individual General  Partner.
     AFM  is a wholly owned subsidiary of AEI Capital Corporation
     of  which Mr. Johnson is the majority shareholder.  AEI Fund
     Management,  Inc. (AEI), an affiliate of AFM,  performs  the
     administrative and operating functions for the Partnership.

     The   terms  of  the  Partnership  offering  called  for   a
     subscription  price of $1,000 per Limited Partnership  Unit,
     payable   on  acceptance  of  the  offer.   The  Partnership
     commenced  operations  on February  15,  1989  when  minimum
     subscriptions    of   1,500   Limited   Partnership    Units
     ($1,500,000)   were   accepted.   The  offering   terminated
     December  4, 1990 when the extended offering period expired.
     The Partnership received subscriptions for 22,783.05 Limited
     Partnership   Units.   Under  the  terms  of   the   Limited
     Partnership  Agreement,  the Limited  Partners  and  General
     Partners  contributed  funds  of  $22,783,050,  and  $1,000,
     respectively.

     During operations, any Net Cash Flow, as defined, which  the
     General Partners determine to distribute will be distributed
     90% to the Limited Partners and 10% to the General Partners;
     provided,  however, that such distributions to  the  General
     Partners will be subordinated to the Limited Partners  first
     receiving an annual, noncumulative distribution of Net  Cash
     Flow equal to 10% of their Adjusted Capital Contribution, as
     defined,  and, provided further, that in no event  will  the
     General Partners receive less than 1% of such Net Cash  Flow
     per  annum. Distributions to Limited Partners will  be  made
     pro rata by Units.

     Any  Net  Proceeds  of Sale as defined,  from  the  sale  or
     financing of properties which the General Partners determine
     to distribute will, after provisions for debts and reserves,
     be  paid  in  the following manner:  (i) first, 99%  to  the
     Limited  Partners and l% to the General Partners  until  the
     Limited  Partners  receive an amount  equal  to:  (a)  their
     Adjusted Capital Contribution plus (b) an amount equal to 6%
     of their Adjusted Capital Contribution per annum, cumulative
     but not compounded, to the extent not previously distributed
     from  Net  Cash Flow; (ii) next, 99% to the Limited Partners
     and  1%  to the General Partners until the Limited  Partners
     receive  an  amount equal to 14% of their  Adjusted  Capital
     Contribution  per annum, cumulative but not  compounded,  to
     the  extent not previously distributed; (iii) next,  to  the
     General  Partners  until  cumulative  distributions  to  the
     General  Partners under Items (ii) and (iii)  equal  15%  of
     cumulative  distributions to all Partners under  Items  (ii)
     and (iii).  Any remaining balance will be distributed 85% to
     the  Limited  Partners  and  15% to  the  General  Partners.
     Distributions to the Limited Partners will be made pro  rata
     by Units.

         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                  NOTES TO FINANCIAL STATEMENTS
                   DECEMBER 31, 2005 AND 2004

(1)  Organization - (Continued)

     For  tax  purposes,  profits  from  operations,  other  than
     profits  attributable  to  the  sale,  exchange,  financing,
     refinancing  or  other  disposition  of  property,  will  be
     allocated  first  in the same ratio in  which,  and  to  the
     extent,  Net  Cash Flow is distributed to the  Partners  for
     such year.  Any additional profits will be allocated 90%  to
     the Limited Partners and 10% to the General Partners. In the
     event  no  Net  Cash  Flow  is distributed  to  the  Limited
     Partners,  90%  of each item of income, gain or  credit  for
     each  respective  year  shall be allocated  to  the  Limited
     Partners,  and 10% of each such item shall be  allocated  to
     the  General Partners.  Net losses from operations  will  be
     allocated 98% to the Limited Partners and 2% to the  General
     Partners.

     For  tax purposes, profits arising from the sale, financing,
     or  other  disposition  of property  will  be  allocated  in
     accordance  with the Partnership Agreement as  follows:  (i)
     first,  to  those  partners with deficit balances  in  their
     capital  accounts  in an amount equal to  the  sum  of  such
     deficit  balances; (ii) second, 99% to the Limited  Partners
     and  1%  to the General Partners until the aggregate balance
     in  the Limited Partners' capital accounts equals the sum of
     the Limited Partners' Adjusted Capital Contributions plus an
     amount  equal to 14% of their Adjusted Capital Contributions
     per  annum, cumulative but not compounded, to the extent not
     previously  allocated; (iii) third, to the General  Partners
     until  cumulative allocations to the General Partners  equal
     15%  of cumulative allocations.  Any remaining balance  will
     be  allocated  85% to the Limited Partners and  15%  to  the
     General  Partners.   Losses will be  allocated  98%  to  the
     Limited Partners and 2% to the General Partners.

     The  General Partners are not required to currently  fund  a
     deficit   capital   balance.   Upon   liquidation   of   the
     Partnership or withdrawal by a General Partner, the  General
     Partners will contribute to the Partnership an amount  equal
     to  the  lesser  of  the deficit balances in  their  capital
     accounts  or  1%  of  total Limited  Partners'  and  General
     Partners' capital contributions.

(2)  Summary of Significant Accounting Policies -

     Financial Statement Presentation

       The  accounts  of  the Partnership are maintained  on  the
       accrual  basis of accounting for both federal  income  tax
       purposes and financial reporting purposes.

     Accounting Estimates

       Management  uses  estimates and assumptions  in  preparing
       these  financial statements in accordance  with  generally
       accepted  accounting  principles.   Those  estimates   and
       assumptions may affect the reported amounts of assets  and
       liabilities,  the  disclosure  of  contingent  assets  and
       liabilities,  and  the  reported  revenues  and  expenses.
       Actual results could differ from those estimates.


         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                  NOTES TO FINANCIAL STATEMENTS
                   DECEMBER 31, 2005 AND 2004

(2)  Summary of Significant Accounting Policies - (Continued)

       The  Partnership regularly assesses whether market  events
       and conditions indicate that it is reasonably possible  to
       recover  the carrying amounts of its investments  in  real
       estate  from  future operations and sales.   A  change  in
       those  market events and conditions could have a  material
       effect on the carrying amount of its real estate.

     Cash Concentrations of Credit Risk

       The  Partnership's  cash  is deposited  primarily  in  one
       financial institution and at times during the year it  may
       exceed FDIC insurance limits.

     Statement of Cash Flows

       For  purposes  of  reporting cash  flows,  cash  and  cash
       equivalents  may include cash in checking,  cash  invested
       in   money   market  accounts,  certificates  of  deposit,
       federal  agency notes and commercial paper with a term  of
       three months or less.

     Receivables

       Credit  terms are extended to tenants in the normal course
       of  business.   The  Partnership performs  ongoing  credit
       evaluations  of  its customers' financial  condition  and,
       generally, requires no collateral.

       Receivables   are   recorded  at   their   estimated   net
       realizable  value.  The Partnership follows  a  policy  of
       providing  an  allowance for doubtful  accounts;  however,
       based on historical experience, and its evaluation of  the
       current status of receivables, the Partnership is  of  the
       belief  that  such  accounts will be  collectible  in  all
       material  respects and thus an allowance is not necessary.
       Accounts  are considered past due if payment is  not  made
       on  a  timely  basis in accordance with the  Partnership's
       credit  terms.   Receivables considered uncollectible  are
       written off.

     Income Taxes

       The  income or loss of the Partnership for federal  income
       tax  reporting  purposes is includable in the  income  tax
       returns  of the partners.  In general, no recognition  has
       been  given to income taxes in the accompanying  financial
       statements.

       The   tax   return   and  the  amount   of   distributable
       Partnership  income or loss are subject to examination  by
       federal   and  state  taxing  authorities.   If  such   an
       examination    results   in   changes   to   distributable
       Partnership  income  or loss, the taxable  income  of  the
       partners would be adjusted accordingly.

         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                  NOTES TO FINANCIAL STATEMENTS
                   DECEMBER 31, 2005 AND 2004

(2)  Summary of Significant Accounting Policies - (Continued)

     Real Estate

       The  Partnership's real estate is leased under triple  net
       leases   classified  as  operating  leases.   The   leases
       provide  for  base  annual  rental  payments  payable   in
       monthly  installments.  The Partnership recognizes  rental
       revenue  according to the terms of the individual  leases.
       For  leases  which  contain stated rental  increases,  the
       increases  are  recognized in the year in which  they  are
       effective.   Contingent  rental  payments  are  recognized
       when  the  contingencies on which the payments  are  based
       are  satisfied  and the rental payments become  due  under
       the terms of the leases.

       Real  estate is recorded at the lower of cost or estimated
       net   realizable  value.   The  Partnership  compares  the
       carrying   amount  of  its  properties  to  the  estimated
       probability-weighted future cash flows expected to  result
       from  the property and its eventual disposition.   If  the
       sum  of  the expected future cash flows is less  than  the
       carrying   amount   of  the  property,   the   Partnership
       recognizes an impairment loss by the amount by  which  the
       carrying amount of the property exceeds the fair value  of
       the property.

       The  Partnership  has capitalized as Investments  in  Real
       Estate   certain   costs  incurred  in  the   review   and
       acquisition  of the properties.  The costs were  allocated
       to the land, buildings and equipment.

       The   buildings  and  equipment  of  the  Partnership  are
       depreciated  using the straight-line method for  financial
       reporting purposes based on estimated useful lives  of  30
       years and 10 years, respectively.

       In  accordance  with  Statement  of  Financial  Accounting
       Standards  No.  144,  Accounting  for  the  Impairment  or
       Disposal  of Long-Lived Assets, upon complete disposal  of
       a  property or classification of a property as Real Estate
       Held  for  Sale,  the Partnership includes  the  operating
       results   and   sale  of  the  property  in   discontinued
       operations.   In  addition,  the Partnership  reclassifies
       the  prior periods operating results and any partial sales
       of the property to discontinued operations.

       The  Partnership accounts for properties owned as tenants-
       in-common  with  affiliated Partnerships and/or  unrelated
       third   parties   using  the  proportionate  consolidation
       method.   Each tenant-in-common owns a separate, undivided
       interest  in  the  properties.  Any tenant-in-common  that
       holds  more than a 50% interest does not control decisions
       over  the other tenant-in-common interests.  The financial
       statements  reflect  only  this  Partnership's  percentage
       share  of  the  properties' land, building and  equipment,
       liabilities, revenues and expenses.

         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                  NOTES TO FINANCIAL STATEMENTS
                   DECEMBER 31, 2005 AND 2004

(2)  Summary of Significant Accounting Policies - (Continued)

       The  Partnership's properties are subject to environmental
       laws  and  regulations  adopted  by  various  governmental
       entities  in the jurisdiction in which the properties  are
       located.   These  laws could require  the  Partnership  to
       investigate  and remediate the effects of the  release  or
       disposal  of  hazardous materials at  these  locations  if
       found.  For each property, an environmental assessment  is
       completed  prior to acquisition.  In addition,  the  lease
       agreements  typically  strictly prohibit  the  production,
       handling, or storage of hazardous materials (except  where
       incidental  to  the  tenant's  business  such  as  use  of
       cleaning  supplies)  in violation  of  applicable  law  to
       restrict  environmental and other  damage.   Environmental
       liabilities  are  recorded  when  it  is  determined   the
       liability  is  probable and the costs  can  reasonably  be
       estimated.   There were no environmental issues  noted  or
       liabilities recorded at December 31, 2005 and 2004.

     Reclassification

       Certain  items  in  the prior year's financial  statements
       have  been  reclassified to conform to 2005  presentation.
       These   reclassifications  had  no  effect  on   Partners'
       capital, net income or cash flows.

     Newly Issued Pronouncements

       The    Partnership   has   considered    the    accounting
       pronouncements  issued  after  December   2004   and   has
       determined that none of these pronouncements will  have  a
       material impact on its financial statements.

(3)  Related Party Transactions -

     The  Partnership  owns a 43.9634% interest in  a  Tumbleweed
     restaurant in Chillicothe, Ohio.  The remaining interests in
     this  property  are owned by AEI Net Lease Income  &  Growth
     Fund   XIX   Limited  Partnership,  an  affiliate   of   the
     Partnership, and an unrelated third party.  The  Partnership
     owns  a  24%  interest in a Garden Ridge retail store.   The
     remaining interests in this property are owned by AEI Income
     &  Growth  Fund XXII Limited Partnership and  AEI  Income  &
     Growth  Fund  24  LLC,  affiliates of the  Partnership,  and
     unrelated  third  parties.   The  Partnership  owns  a   50%
     interest in a Jared Jewelry store and an Eckerd drug  store.
     The remaining interests in these properties are owned by AEI
     Net Lease Income & Growth Fund XIX Limited Partnership.

         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                  NOTES TO FINANCIAL STATEMENTS
                   DECEMBER 31, 2005 AND 2004

(3)  Related Party Transactions - (Continued)

     The   Partnership  owned  a  24%  interest  in  a   Razzoo's
     restaurant in Alpharetta, Georgia.  The remaining  interests
     in this property were owned by AEI Net Lease Income & Growth
     Fund  XIX Limited Partnership, AEI Income & Growth  Fund  23
     LLC  and  AEI  Private  Net  Lease Millennium  Fund  Limited
     Partnership, affiliates of the Partnership.  The Partnership
     owned  a 50% interest in a Johnny Carino's restaurant.   The
     remaining  interest in this property was owned by  AEI  Real
     Estate  Fund XVII Limited Partnership, an affiliate  of  the
     Partnership.   The Partnership owned a 50%  interest  in  an
     Applebee's restaurant in Stow, Ohio.  The remaining interest
     in  this property was owned by AEI Net Lease Income & Growth
     Fund XIX Limited Partnership.

     AEI   and  AFM  received  the  following  compensation   and
     reimbursements for costs and expenses from the Partnership:

                                       Total Incurred by the Partnership
                                        for the Years Ended December 31

                                                   2005         2004
a.AEI and AFM are reimbursed for all costs
  incurred in connection with managing the
  Partnership's operations, maintaining the
  Partnership's books and communicating
  the results of operations to the Limited
  Partners.                                     $ 187,923     $ 212,558
                                                 ========      ========
b.AEI and AFM are reimbursed for all direct
  expenses they have paid on the Partnership's
  behalf to third parties relating to Partnership
  administration and property management.
  These expenses included printing costs, legal
  and filing fees, direct administrative costs,
  outside audit costs, taxes, insurance and
  other property costs.                         $  36,235     $  23,501
                                                 ========      ========
c.AEI is reimbursed for all costs and direct
  expenses incurred by it in acquiring properties
  on behalf of the Partnership.  The amounts are net
  of financing and commitment fees and expense
  reimbursements received by the Partnership from
  the sellers and/or tenants in the amounts of
  $2,948 for 2004.                              $       0     $  97,648
                                                 ========      ========
d.AEI is reimbursed for all costs incurred in
  connection with the sale of property.         $ 130,972     $  35,169
                                                 ========      ========


         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                  NOTES TO FINANCIAL STATEMENTS
                   DECEMBER 31, 2005 AND 2004

(3)  Related Party Transactions - (Continued)

     The  payable  to  AEI Fund Management, Inc.  represents  the
     balance  due for the services described in 3a, b, c  and  d.
     This balance is non-interest bearing and unsecured and is to
     be paid in the normal course of business.

(4)  Investments in Real Estate -

     The  Partnership  leases its properties to  various  tenants
     under  triple net leases, which are classified as  operating
     leases.  Under a triple net lease, the tenant is responsible
     for  all  real estate taxes, insurance, maintenance, repairs
     and  operating expenses of the property.  At  the  time  the
     properties were acquired, the remaining primary Lease  terms
     varied  from 15 to 20 years.  The Leases provide the tenants
     with  two to four five-year renewal options subject  to  the
     same  terms and conditions as the primary term.  The  Leases
     contain  rent  clauses  which  entitle  the  Partnership  to
     receive additional rent in future years based on stated rent
     increases  or  if  gross receipts for  the  property  exceed
     certain specified amounts, among other conditions.

     Certain  tenants have been granted options to  purchase  the
     property at a formula price.  The option price is stated  to
     be the greater of the price determined by the stated formula
     or  the fair market value of the property as agreed upon  by
     the  parties or determined based on appraisals.  The formula
     price  is  the  original  purchase  price  of  the  property
     increased  by  a  specified percentage per year,  compounded
     annually.  The actual sale price of a property to  a  tenant
     may  or may not exceed original cost depending on market and
     other conditions.

     The  Partnership's properties are commercial,  single-tenant
     buildings.   One  of  the  Taco Cabana  restaurants  in  San
     Antonio,  Texas was constructed in 1984, renovated  in  1991
     and  acquired by the Partnership after the renovation.   The
     Children's  World  in  Columbus, Ohio  was  constructed  and
     acquired  in  1992.   The Tractor Supply Company  store  and
     Champps   Americana  restaurant  in  Columbus,   Ohio   were
     constructed   and   acquired  in  1996.    The   Fuddruckers
     restaurant  was  constructed  and  acquired  in  1997.   The
     Tumbleweed restaurant was constructed and acquired in  1998.
     The  Garden Ridge retail store was constructed in  2001  and
     acquired  in  2003.  The Jared Jewelry store was constructed
     in  2003  and acquired in 2004.  The Eckerd drug  store  was
     constructed and acquired in 2004.  The remaining  properties
     were constructed and acquired in either 1990 or 1991.  There
     have been no costs capitalized as improvements subsequent to
     the acquisitions.

         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                  NOTES TO FINANCIAL STATEMENTS
                   DECEMBER 31, 2005 AND 2004

(4)  Investments in Real Estate - (Continued)

     The  cost  of  the properties not held for sale and  related
     accumulated  depreciation  at  December  31,  2005  are   as
     follows:

                                        Buildings and            Accumulated
   Property                        Land   Equipment      Total   Depreciation

Children's World,
 Blue Springs, MO              $  162,290 $  628,981 $   791,271  $  343,752
Children's World, Lenexa, KS      185,788    797,739     983,527     428,229
Children's World, Westerville, OH 157,848    832,413     990,261     425,716
Taco Cabana, San Antonio, TX       61,004     46,929     107,933      22,304
Children's World, Columbus, OH    157,569    861,633   1,019,202     407,978
Tractor Supply Company,
 Bristol, VA                       31,092     65,673      96,765      23,006
Champps Americana,
 Columbus, OH                       4,373      8,611      12,984       2,846
Fuddruckers, Thornton, CO           3,383      7,310      10,693       2,130
Tumbleweed, Chillicothe, OH       229,387    331,225     560,612      84,148
Garden Ridge, Woodlands, TX       584,784  1,411,066   1,995,850     111,710
Jared Jewelry, Lakewood, CO       933,770  1,083,863   2,017,633      67,742
Eckerd, Auburn, NY                914,854  1,372,279   2,287,133      74,332
                                ---------- ---------- -----------  ----------
                               $3,426,142 $7,447,722 $10,873,864  $1,993,893
                                ========== ========== ===========  ==========

     On  February  5,  2004,  the  Partnership  purchased  a  50%
     interest in a Jared Jewelry store in Lakewood, Colorado  for
     $2,017,633.   The  property is leased to  Sterling  Jewelers
     Inc. under a Lease Agreement with a primary term of 20 years
     and annual rental payments of $155,219.

     On May 10, 2004, the Partnership purchased a 50% interest in
     an  Eckerd  drug  store in Auburn, New York for  $2,287,133.
     The  property is leased to Eckerd Corporation under a  Lease
     Agreement with a primary term of 20 years and annual  rental
     payments of $184,753.

         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                  NOTES TO FINANCIAL STATEMENTS
                   DECEMBER 31, 2005 AND 2004

(4)  Investments in Real Estate - (Continued)

     In February 2004, Garden Ridge, L.P. (GR), the tenant of the
     Garden  Ridge  retail store in Woodlands, Texas,  filed  for
     Chapter 11 bankruptcy reorganization.  In press releases, GR
     reported rejecting the leases of 9 of 44 stores and that  it
     was  attempting  to renegotiate lease terms  for  its  other
     stores.   The Woodlands store was not identified as  one  of
     the  nine  to be closed.  GR entered into negotiations  with
     the  property owners of the Woodlands store to arrive at  an
     agreement  to  modify rental terms that would induce  GR  to
     affirm  the  Lease for this property.  GR and  the  property
     owners  subsequently agreed to a lease amendment  to  reduce
     the  annual rent by 23%, with a 10% rent increase on January
     1,  2008.  The Partnership's share of the new rental  amount
     is  $175,968.  The amendment provides for additional  rental
     payments if the store's sales exceed certain stated amounts.
     The  amendment also calls for the owners to waive  rent  for
     one   month  during  the  first  six  months  following  the
     bankruptcy  court's  approval of  GR's  affirmation  of  the
     Lease.   With  the exception of February 2004, GR  made  all
     rental payments due under its original lease.

     On  April 28, 2005, the bankruptcy court approved GR's  Plan
     of  Reorganization.  As part of the Plan, the lease for  the
     Woodlands  store was affirmed by GR and the lease  amendment
     became  effective.  Pursuant to the amendment,  GR  selected
     July  2005  as  the one month to have rent waived.   In  May
     2005,  GR  paid the rent due for February 2004 and, pursuant
     to  the amendment, GR was entitled to credit an equal amount
     against  any  installment of rent due  in  the  future.   GR
     applied  the credit for the February rent against  rent  due
     for  August  and  September 2005.  As of the  date  of  this
     report, GR has complied with all Lease terms as amended.

     The  Partnership owns a 9.3699% interest in  a  Taco  Cabana
     restaurant  in San Antonio, Texas, a 7.5158% interest  in  a
     Tractor Supply Company store, a .5061% interest in a Champps
     Americana restaurant in Columbus, Ohio and a .7606% interest
     in  a  Fuddruckers restaurant.  The remaining  interests  in
     these  properties are owned by unrelated third parties,  who
     own the property with the Partnership as tenants-in-common.

     For  properties owned as of December 31, 2005,  the  minimum
     future rent payments required by the leases are as follows:

                       2006          $ 1,099,125
                       2007              746,710
                       2008              629,060
                       2009              629,303
                       2010              620,738
                       Thereafter      6,971,119
                                      -----------
                                     $10,696,055
                                      ===========


     There were no contingent rents recognized in 2005 and 2004.


         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                  NOTES TO FINANCIAL STATEMENTS
                   DECEMBER 31, 2005 AND 2004

(5)  Major Tenants -

     The following schedule presents rent revenue from individual
     tenants,   or  affiliated  groups  of  tenants,   who   each
     contributed more than ten percent of the Partnership's total
     rent revenue for the years ended December 31:

          Tenants              Industry           2005       2004

     KinderCare Learning
      Centers, Inc.           Child Care      $ 533,560   $ 525,530
     Texas Taco Cabana L.P.   Restaurant        272,382     263,171
     Eckerd Corporation       Retail            184,753         N/A
     Garden Ridge, L.P.       Retail                N/A     186,424
                                               ---------   ---------
     Aggregate rent revenue of major tenants  $ 990,695   $ 975,125
                                               =========   =========
     Aggregate rent revenue of major tenants as
     a percentage of total rent revenue              59%         56%
                                               =========   =========

(6)  Discontinued Operations -

     In  October 2003, the Partnership entered into an  agreement
     to  sell  the  Cheddar's restaurant in  Clive,  Iowa  to  an
     unrelated third party.  On January 6, 2004, the sale  closed
     with   the  Partnership  receiving  net  sale  proceeds   of
     $2,131,025, which resulted in a net gain of $1,223,369.   At
     the   time   of  sale,  the  cost  and  related  accumulated
     depreciation was $1,392,249 and $484,593, respectively.

     In  July  2003,  the  tenant of the Razzoo's  restaurant  in
     Alpharetta,  Georgia notified the Partnership  that  it  was
     experiencing financial difficulty stemming from  lower  than
     expected  sales and that it might not be able to pay  future
     rents.   In late 2003, the tenant closed the restaurant  and
     said  that it no longer intended to operate a restaurant  at
     the  site.  The Partnership and the tenant entered  into  an
     agreement,  effective  November 1, 2004,  to  terminate  the
     lease   and  return  possession  of  the  property  to   the
     Partnership.   Rents  were  current  through  the  date   of
     termination.  As part of the agreement, the Partnership  was
     reimbursed for certain expenses it incurred related to legal
     action  it  pursued in connection with this situation.   The
     Partnership listed the property for sale with a real  estate
     broker  in  the  Alpharetta area.  While  the  property  was
     vacant,  the  Partnership was responsible  for  real  estate
     taxes and other costs required to maintain the property.

         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                  NOTES TO FINANCIAL STATEMENTS
                   DECEMBER 31, 2005 AND 2004

(6)  Discontinued Operations - (Continued)

     Based  on an analysis of market conditions in the area,  the
     Partnership   determined  the  property  was   impaired   in
     accordance  with the requirements of Statement of  Financial
     Accounting  Standards No. 144, Accounting for the Impairment
     or  Disposal  of  Long-Lived Assets.  As a  result,  in  the
     fourth  quarter of 2003, a charge to discontinued operations
     for real estate impairment of $252,399 was recognized, which
     was  the  difference between the book value at December  31,
     2003  of  $852,399 and the estimated fair value of $600,000.
     The  charge  was  recorded against the  cost  of  the  land,
     building  and equipment.  At December 31, 2004, the property
     was classified as Real Estate Held for Sale.

     In  December 2004, the Partnership entered into an agreement
     to  sell  the  property in Alpharetta to an unrelated  third
     party.   On  March  29,  2005,  the  sale  closed  with  the
     Partnership  receiving net sale proceeds of $648,425,  which
     resulted in a net gain of $48,425.

     On  May  31, 2005, the Partnership sold its 5.8291% interest
     in  the  Applebee's  restaurant in Destin,  Florida  to  the
     tenant.   The  Partnership received  net  sale  proceeds  of
     $109,804, which resulted in a net gain of $62,281.  The cost
     and  related  accumulated depreciation of the interest  sold
     was  $65,215  and  $17,692, respectively.  At  December  31,
     2004,  the property was classified as Real Estate  Held  for
     Sale with a book value of $47,523.

     During  the third quarter of 2005, the Partnership sold  its
     50% interest in the Johnny Carino's restaurant in Mansfield,
     Texas,  in  three separate transactions, to unrelated  third
     parties.   The Partnership received total net sale  proceeds
     of  $1,490,853,  which resulted in a net gain  of  $506,543.
     The   cost  and  related  accumulated  depreciation  of  the
     interests sold was $1,028,886 and $44,576, respectively.

     On  October  18, 2005, the Partnership sold the Old  Country
     Buffet  restaurant in Northlake, Illinois  to  an  unrelated
     third party.  The Partnership received net sale proceeds  of
     $1,973,839,  which resulted in a net gain of  $851,215.   At
     the   time   of  sale,  the  cost  and  related  accumulated
     depreciation was $1,350,804 and $228,180, respectively.

     On  April 30, 2004, the Partnership purchased a 50% interest
     in  an  Applebee's restaurant in Stow, Ohio for  $1,575,755.
     The  property  is  leased to Apple Ohio LLC  under  a  Lease
     Agreement with a primary term of 20 years and annual  rental
     payments of $120,043.

     In  October 2005, the Partnership entered into an  agreement
     to  sell its interest in the Applebee's restaurant in  Stow,
     Ohio to an unrelated third party.  On November 15, 2005, the
     sale closed with the Partnership receiving net sale proceeds
     of $1,835,784, which resulted in a net gain of $310,234.  At
     the   time   of  sale,  the  cost  and  related  accumulated
     depreciation was $1,575,755 and $50,205, respectively.

         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                  NOTES TO FINANCIAL STATEMENTS
                   DECEMBER 31, 2005 AND 2004

(6)  Discontinued Operations - (Continued)

     In  May  2003, the Partnership entered into an agreement  to
     sell  a Taco Cabana restaurant in San Antonio, Texas to  the
     tenant.  The agreement was extended several times to  enable
     the  tenant  to  complete their due  diligence  and  certain
     negotiations with adjacent land owners.  During  this  time,
     the tenant continued to pay rent and complied with the lease
     obligations.   Subsequent to December  31,  2005,  the  sale
     closed  with the Partnership receiving net sale proceeds  of
     approximately $1,640,000, which resulted in a  net  gain  of
     approximately $482,300.  At the time of sale, the  cost  and
     related   accumulated  depreciation   was   $1,406,426   and
     $248,772, respectively.  At December 31, 2005 and 2004,  the
     property was classified as Real Estate Held for Sale with  a
     book value of $1,157,654.

     During 2005 and 2004, the Partnership distributed $5,473,401
     and  $405,275,  respectively, of net sale  proceeds  to  the
     Limited  and  General Partners as part  of  their  quarterly
     distributions,  which  represented a return  of  capital  of
     $283.44   and   $20.71   per   Limited   Partnership   Unit,
     respectively.

     The financial results for these properties are reflected  as
     Discontinued   Operations  in  the  accompanying   financial
     statements.   The following are the results of  discontinued
     operations for the years ended December 31:

                                                2005        2004

     Rental Income                          $   546,328   $   659,344
     Property Management Expenses                (7,001)          337
     Depreciation                               (63,934)      (82,574)
     Gain on Disposal of Real Estate          1,778,698     1,223,369
                                             -----------   -----------
       Income from Discontinued Operations  $ 2,254,091   $ 1,800,476
                                             ===========   ===========

(7)  Partners' Capital -

     Cash  distributions of $67,723 and $17,438 were made to  the
     General Partners and $6,704,595 and $1,726,371 were made  to
     the  Limited Partners for the years ended December 31,  2005
     and 2004, respectively.  The Limited Partners' distributions
     represent  $349.67 and $89.00 per Limited  Partnership  Unit
     outstanding  using 19,174 and 19,398 weighted average  Units
     in 2005 and 2004, respectively.  The distributions represent
     $140.73 and $89.00 per Unit of Net Income and $209.94 and $-
     0-  per  Unit  of  return  of  capital  in  2005  and  2004,
     respectively.

     As  part  of  the  Limited  Partner distributions  discussed
     above,  the Partnership distributed $5,418,667 and  $401,222
     of   proceeds  from  property  sales  in  2005   and   2004,
     respectively.    The  distributions  reduced   the   Limited
     Partners' Adjusted Capital Contributions.


         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                  NOTES TO FINANCIAL STATEMENTS
                   DECEMBER 31, 2005 AND 2004

(7)  Partners' Capital - (Continued)

     The  Partnership may acquire Units from Limited Partners who
     have  tendered their Units to the Partnership.   Such  Units
     may  be  acquired  at  a discount.  The Partnership  is  not
     obligated to purchase in any year more than 5% of the number
     of  Units outstanding at the beginning of the year.   In  no
     event  shall the Partnership be obligated to purchase  Units
     if,  in the sole discretion of the Managing General Partner,
     such  purchase would impair the capital or operation of  the
     Partnership.

     During  2005, 28 Limited Partners redeemed a total of 261.25
     Partnership  Units  for  $229,573  in  accordance  with  the
     Partnership  Agreement.  During 2004,  21  Limited  Partners
     redeemed  a  total of 178.2 Partnership Units for  $157,691.
     The  Partnership acquired these Units using  Net  Cash  Flow
     from  operations.   The redemptions increase  the  remaining
     Limited Partners' ownership interest in the Partnership.  As
     a  result of these redemption payments and pursuant  to  the
     Partnership   Agreement,  the  General   Partners   received
     distributions  of  $2,319  and  $1,593  in  2005  and  2004,
     respectively.

     After  the  effect of redemptions and the return of  capital
     from   the   sale   of   property,  the   Adjusted   Capital
     Contribution,  as defined in the Partnership  Agreement,  is
     $744.85 per original $1,000 invested.

(8)  Income Taxes -

     The   following  is  a  reconciliation  of  net  income  for
     financial reporting purposes to income reported for  federal
     income tax purposes for the years ended December 31:

                                                          2005       2004

     Net  Income  for Financial Reporting Purposes   $ 2,981,857  $ 2,436,839

     Depreciation for Tax Purposes Under
       Depreciation  for Financial Reporting Purposes     25,983        4,500

     Income Accrued for Tax Purposes Over
        Income  for  Financial  Reporting  Purposes        4,825       39,892

     Gain on Sale of Real Estate for Tax Purposes
       Under  Gain for Financial Reporting Purposes     (286,557)     (25,385)
                                                      -----------  -----------
           Taxable Income to Partners                $ 2,726,108  $ 2,455,846
                                                      ===========  ===========


         AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
                  NOTES TO FINANCIAL STATEMENTS
                   DECEMBER 31, 2005 AND 2004

(8)  Income Taxes - (Continued)

     The  following is a reconciliation of Partners' capital  for
     financial  reporting purposes to Partners' capital  reported
     for federal income tax purposes for the years ended December
     31:
                                                            2005        2004

     Partners' Capital for Financial Reporting Purposes $11,028,738 $15,051,091

     Adjusted Tax Basis of Investments in Real Estate
      Over Net Investments in Real Estate
      for Financial Reporting Purposes                      176,799     437,373

     Income Accrued for Tax Purposes Over
       Income  for  Financial  Reporting  Purposes           44,717      39,892

     Syndication Costs Treated as Reduction
       of  Capital for Financial Reporting Purposes       3,336,442   3,336,442
                                                         ----------  ----------
         Partners' Capital for Tax Reporting Purposes   $14,586,696 $18,864,798
                                                         ==========  ==========

(9)  Fair Value of Financial Instruments -

     The estimated fair values of the financial instruments, none
     of  which  are held for trading purposes, are as follows  at
     December 31:

                                       2005                  2004
                              Carrying       Fair    Carrying      Fair
                               Amount       Value     Amount      Value

     Money Market Funds    $ 4,707,199   $ 4,707,199 $ 1,122,394 $ 1,122,394
                            -----------   ----------  ----------  ----------
       Total Cash and
         Cash Equivalents  $ 4,707,199   $ 4,707,199 $ 1,122,394 $ 1,122,394
                            ===========   ==========  ==========  ==========

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
       ACCOUNTING AND FINANCIAL DISCLOSURE.

       None.

ITEM 8A.  CONTROLS AND PROCEDURES.

       (a) Evaluation of disclosure controls and procedures

        Under  the  supervision  and with  the  participation  of
management, including its President and Chief Financial  Officer,
the  Managing  General Partner of the Partnership  evaluated  the
effectiveness  of  the  design and operation  of  its  disclosure
controls  and procedures (as defined in Rule 13a-14(c) under  the
Exchange  Act).   Based upon that evaluation, the  President  and
Chief Financial Officer of the Managing General Partner concluded
that,  as  of  the end of the period covered by this report,  the
disclosure  controls  and  procedures  of  the  Partnership   are
adequately  designed to ensure that information  required  to  be
disclosed  by  us  in  the reports we file or  submit  under  the
Exchange  Act  is recorded, processed, summarized  and  reported,
within the time periods specified in applicable rules and forms.

       (b)  Changes in internal controls

         There   were   no  significant  changes  made   in   the
Partnership's  internal controls during the  most  recent  period
covered  by  this  report that have materially affected,  or  are
reasonably   likely  to  materially  affect,  the   Partnership's
internal control over financial reporting.

ITEM 8B.  OTHER INFORMATION.

       None.


                            PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
       PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.

        The  registrant  is  a  limited partnership  and  has  no
officers,  directors, or direct employees.  The General  Partners
manage  and  control the Partnership's affairs and  have  general
responsibility  and  the  ultimate  authority  in   all   matters
affecting  the Partnership's business.  The General Partners  are
AEI  Fund  Management  XVIII, Inc. (AFM),  the  Managing  General
Partner,   and  Robert  P.  Johnson,  Chief  Executive   Officer,
President  and  sole  director  of AFM,  the  Individual  General
Partner.   AFM  is  a  wholly  owned subsidiary  of  AEI  Capital
Corporation  of  which  Mr. Johnson is the majority  shareholder.
AFM  has only one senior financial executive, its Chief Financial
Officer.   The  Chief Financial Officer reports directly  to  Mr.
Johnson  and  is  accountable for his  actions  to  Mr.  Johnson.
Although Mr. Johnson and AFM require that all of their personnel,
including  the  Chief  Financial Officer, engage  in  honest  and
ethical  conduct,  ensure  full,  fair,  accurate,  timely,   and
understandable    disclosure,   comply   with   all    applicable
governmental  laws,  rules and regulations,  and  report  to  Mr.
Johnson   any  deviation  from  these  principles,  because   the
organization  is  composed of only approximately 35  individuals,
because  the  management of a partnership by an entity  that  has
different  interests in distributions and income  than  investors
involves numerous conflicts of interest that must be resolved  on
a  daily  basis, and because the ultimate decision maker  in  all
instances  is Mr. Johnson, AFM has not adopted a formal  code  of
conduct.   Instead,  the materials pursuant  to  which  investors
purchase Units disclose these conflicts of interest in detail and
Mr.  Johnson,  as  the  CEO and sole director  of  AFM,  resolves
conflicts  to  the  best  of  his ability,  consistent  with  his
fiduciary obligations to AFM and the fiduciary obligations of AFM
to  the  Partnership.  The director and officers of  AFM  are  as
follows:

        Robert  P.  Johnson, age 61, is Chief Executive  Officer,
President  and  sole director and has held these positions  since
the  formation of AFM in September 1988, and has been elected  to
continue  in these positions until December 2006.  From  1970  to
the  present, he has been employed exclusively in the  investment
industry,  specializing in limited partnership  investments.   In
that capacity, he has been involved in the development, analysis,
marketing   and  management  of  public  and  private  investment
programs investing in net lease properties as well as public  and
private  investment  programs investing  in  energy  development.
Since 1971, Mr. Johnson has been the president, a director and  a
registered principal of AEI Securities, Inc., which is registered
with  the SEC as a securities broker-dealer, is a member  of  the
National Association of Securities Dealers, Inc. (NASD) and is  a
member  of the Security Investors Protection Corporation  (SIPC).
Mr.  Johnson  has  been president, a director and  the  principal
shareholder   of  AEI  Fund  Management,  Inc.,  a  real   estate
management  company founded by him, since 1978.  Mr.  Johnson  is
currently  a general partner or principal of the general  partner
in  eleven  limited partnerships and a managing  member  in  four
LLCs.

        Patrick  W.  Keene,  age 46, is Chief Financial  Officer,
Treasurer  and  Secretary  and has  held  these  positions  since
January  22,  2003  and  has been elected to  continue  in  these
positions  until December 2006.  Mr. Keene has been  employed  by
AEI  Fund  Management, Inc. and affiliated entities  since  1986.
Prior  to being elected to the positions above, he was Controller
of  the various entities.  From 1982 to 1986, Mr. Keene was  with
KPMG  Peat  Marwick  Certified Public Accountants,  first  as  an
auditor and later as a tax manager.  Mr. Keene is responsible for
all accounting functions of AFM and the registrant.


ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
       PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.

       Since Mr. Johnson serves as the Individual General Partner
of  the Partnership, as well as the sole director of AFM, all  of
the  duties  that  might be assigned to an  audit  committee  are
assigned  to Mr. Johnson.  Mr. Johnson is not an audit  committee
financial expert, as defined.  As an officer and majority  owner,
through  a parent company, of AFM, and as the Individual  General
Partner, Mr. Johnson is not a "disinterested director" and may be
subject to a number of conflicts of interests in his capacity  as
sole director of AFM.

        Before the independent auditors are engaged, Mr. Johnson,
as the sole director of AFM, approves all audit-related fees, and
all permissible nonaudit fees, for services of our auditors.

Section 16(a) Beneficial Ownership Reporting Compliance

        Under federal securities laws, the directors and officers
of  the  General  Partner of the Partnership, and any  beneficial
owner  of  more than 10% of a class of equity securities  of  the
Partnership,  are  required  to report  their  ownership  of  the
Partnership's equity securities and any changes in such ownership
to  the  Securities  and Exchange Commission (the  "Commission").
Specific due dates for these reports have been established by the
Commission, and the Partnership is required to disclose  in  this
Annual Report on 10-KSB any delinquent filing of such reports and
any  failure  to file such reports during the fiscal  year  ended
December  31, 2005.  Based upon information provided by  officers
and directors of the General Partner, all officers, directors and
10% owners filed all reports on a timely basis in the 2005 fiscal
year.

ITEM 10.   EXECUTIVE COMPENSATION.

        The General Partner and affiliates are reimbursed at cost
for  all  services performed on behalf of the registrant and  for
all  third party expenses paid on behalf of the registrant.   The
cost for services performed on behalf of the registrant is actual
time  spent  performing such services plus  an  overhead  burden.
These  services include organizing the registrant  and  arranging
for  the  offer  and  sale  of Units,  reviewing  properties  for
acquisition and rendering administrative, property management and
property  sales services.  The amount and nature of such payments
are detailed in Item 12 of this annual report on Form 10-KSB.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
        MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

        The following table sets forth information pertaining  to
the   ownership  of  the  Units  by  each  person  known  by  the
Partnership to beneficially own 5% or more of the Units, by  each
General  Partner, and by each officer or director of the Managing
General Partner as of February 28, 2006:

     Name and Address                   Number of     Percent
   of Beneficial Owner                  Units Held    of Class

   AEI Fund Management XVIII, Inc.          0            0%
   1300 Wells Fargo Place
   30 East 7th Street, St. Paul, Minnesota 55101

   Robert P. Johnson                        5            *
   1300 Wells Fargo Place
   30 East 7th Street, St. Paul, Minnesota 55101

   Patrick W. Keene                         0            0%
   1300 Wells Fargo Place
   30 East 7th Street, St. Paul, Minnesota 55101

*     Less than 1%

The  persons  set forth in the preceding table hold  sole  voting
power  and power of disposition with respect to all of the  Units
set forth opposite their names.  The General Partners know of  no
holders of more than 5% of the outstanding Units.

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

        The  registrant,  AFM  and  its  affiliates  have  common
management and utilize the same facilities.  As a result, certain
administrative  expenses  are  allocated  among   these   related
entities.   All  of  such activities and any  other  transactions
involving the affiliates of the General Partner of the registrant
are  governed  by,  and  are conducted in  conformity  with,  the
limitations set forth in the Limited Partnership Agreement of the
registrant.   Reference  is  made to  Note  3  of  the  Financial
Statements,   as  presented,  and  is  incorporated   herein   by
reference,  for  details of related party  transactions  for  the
years ended December 31, 2005 and 2004.

        The  limitations  included in the  Partnership  Agreement
require   that  the  cumulative  reimbursements  to  the  General
Partners  and  their affiliates for administrative  expenses  not
allowed under the NASAA Guidelines ("Guidelines") will not exceed
the  sum of (i) the front-end fees allowed by the Guidelines less
the  front-end fees paid by the Partnership, (ii) the  cumulative
property management fees allowed by the Guidelines but not  paid,
(iii)  any real estate commission allowed by the Guidelines,  and
(iv)  10%  of  Net  Cash  Flow less the Net  Cash  Flow  actually
distributed to the General Partners.  The administrative expenses
not  allowed under the Guidelines include a controlling  person's
salary  and  fringe  benefits,  rent  and  depreciation.   As  of
December  31, 2005, the cumulative reimbursements to the  General
Partners and their affiliates did not exceed those amounts.


ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
         (Continued)

        The following table sets forth the forms of compensation,
distributions  and cost reimbursements paid by the registrant  to
the  General Partners or their Affiliates in connection with  the
operation  of  the Fund and its properties for  the  period  from
inception through December 31, 2005.

                                                      Amount Incurred
Person or Entity                                       From Inception
 Receiving                 Form and Method         (September 20, 1988) to
Compensation               of Compensation            December 31, 2005

AEI Securities, Inc. Selling Commissions equal to 7%       $2,278,305
                     of proceeds plus a 3% nonaccountable
                     expense allowance, most of which was
                     reallowed to Participating Dealers.

General Partners and Reimbursement at Cost for other       $1,064,137
Affiliates           Organizaton and Offering Costs.

General Partners and Reimbursement at Cost for all         $  642,892
Affiliates           Acquisition Expenses

General Partners and Reimbursement at Cost for all         $4,055,604
Affiliates           Administrative Expenses attributable
                     to the Fund, including all expenses
                     related to management of the Fund's
                     properties and all other transfer
                     agency, reporting, partner relations
                     and other administrative functions.

General Partners and Reimbursement at Cost for all         $  751,993
Affiliates           expenses related to the disposition
                     of the Fund's properties.

General Partners     1% of Net Cash Flow in any fiscal     $  253,922
                     year until the Limited Partners have
                     received annual, non-cumulative
                     distributions of Net Cash Flow  equal
                     to 10% of their Adjusted Capital
                     Contributions and 10% of any remaining
                     Net Cash Flow in such fiscal year.

General Partners     15% of distributions of Net Proceeds  $   86,556
                     of Sale other than distributions
                     necessary to restore Adjusted Capital
                     Contributions and provide a 6%
                     cumulative return to Limited  Partners.
                     The General  Partners  will receive
                     only 1% of distributions of Net Proceeds
                     of Sale until Limited Partners have
                     received an amount equal to (a) their
                     Adjusted Capital Contributions,  plus
                     (b) an amount equal to 14% of their
                     Adjusted Capital Contributions per
                     annum, cumulative but not compounded,
                     less (c) all previous cash distributions
                     to the Limited Partners.


                             PART IV

ITEM 13.    EXHIBITS.

     3.1   Certificate  of Limited Partnership  (incorporated  by
     reference  to  Exhibit 3.1 of the registrant's  Registration
     Statement  on Form S-11 filed September 26, 1988  [File  No.
     33-24419]).

     3.2    Limited   Partnership  Agreement   (incorporated   by
     reference  to  Exhibit 3.2 of the registrant's  Registration
     Statement  on Form S-11 filed September 26, 1988  [File  No.
     33-24419]).

     10.1  Net  Lease Agreement dated June 26, 1990  between  the
     Partnership  and  Children's World  Learning  Centers,  Inc.
     relating  to  the  Property at 2100 North  Highway  7,  Blue
     Springs,  Missouri  (incorporated by  reference  to  Exhibit
     10.6 of Form 10-K filed July 27, 1992).

     10.2  Net  Lease Agreement dated September 13, 1990  between
     the  Partnership and Children's World Learning Centers, Inc.
     relating  to  the Property at 8555 Monrovia Street,  Lenexa,
     Kansas  (incorporated by reference to Exhibit 10.8  of  Form
     10-K filed July 27, 1992).

     10.3  Net  Lease Agreement dated December 29,  1990  between
     the  Partnership  and  Taco Cabana,  Inc.  relating  to  the
     Property  at  7339  San  Pedro Avenue,  San  Antonio,  Texas
     (incorporated  by  reference to Exhibit 10.9  of  Form  10-K
     filed July 27, 1992).

     10.4  Net  Lease Agreement dated June 20, 1991  between  the
     Partnership  and  Children's World  Learning  Centers,  Inc.
     relating  to the Property at 1231 Sunbury Road, Westerville,
     Ohio (incorporated by reference to Exhibit 10.12 of Form 10-
     K filed July 27, 1992).

     10.5  Net  Lease Agreement dated July 19, 1991  between  the
     Partnership  and Taco Cabana, Inc. relating to the  Property
     at  6867  Highway 90 West, San Antonio, Texas  (incorporated
     by  reference to Exhibit 10.13 of Form 10-K filed  July  27,
     1992).

     10.6  Net  Lease Agreement dated July 28, 1992  between  the
     Partnership  and  Children's World  Learning  Centers,  Inc.
     relating  to  the  Property  at  4885  Cherry  Bottom  Road,
     Columbus,  Ohio (incorporated by reference to Exhibit  10.17
     of Form 10-K filed March 29, 1993).

     10.7  Net  Lease Agreement dated April 10, 1996 between  the
     Partnership,  Robert P. Johnson and Tractor  Supply  Company
     relating  to  the  Property at Old Airport  Road  and  I-81,
     Bristol,  Virginia  (incorporated by  reference  to  Exhibit
     10.2 of Form 8-K filed April 17, 1996).

     10.8  Net Lease Agreement dated August 29, 1996 between  the
     Partnership,   AEI   Income  &  Growth  Fund   XXI   Limited
     Partnership  and  Americana Dining Corporation  relating  to
     the  Property  at  161  E. Campus View Boulevard,  Columbus,
     Ohio (incorporated by reference to Exhibit 10.3 of Form  8-K
     filed September 12, 1996).

     10.9  Net  Lease Agreement dated July 30, 1977  between  the
     Partnership  and Fuddruckers, Inc. relating to the  Property
     at    12020    Pennsylvania   Street,   Thornton,   Colorado
     (incorporated  by reference to Exhibit 10.6 of  Form  10-QSB
     filed August 5, 1997).

     10.10      Net Lease Agreement dated April 13, 1998  between
     the  Partnership,  AEI Net Lease Income &  Growth  Fund  XIX
     Limited Partnership, Robert P. Johnson, and Tumbleweed,  LLC
     relating  to  the  Property  at 1150  North  Bridge  Street,
     Chillicothe,  Ohio  (incorporated by  reference  to  Exhibit
     10.2 of Form 10-QSB filed May 8, 1998).

     10.11      First  Amendment  to Net  Lease  Agreement  dated
     November  20,  1998 between the Partnership, AEI  Net  Lease
     Income  &  Growth  Fund XIX Limited Partnership,  Robert  P.
     Johnson  and  Tumbleweed, LLC relating to  the  Property  at
     1150  North  Bridge Street, Chillicothe, Ohio  (incorporated
     by  reference  to Exhibit 10.70 of Form 10-KSB  filed  March
     15, 1999).

ITEM 13. EXHIBITS.  (Continued)

     10.12      Purchase  Agreement dated May 21,  2003,  between
     the  Partnership and Texas Taco Cabana, LP relating  to  the
     Property  at  7339  San  Pedro Avenue,  San  Antonio,  Texas
     (incorporated  by reference to Exhibit 10.1 of  Form  10-QSB
     filed August 8, 2003).

     10.13      Assignment  of  Lease, Indemnity  and  Assumption
     Agreement  dated  August 27, 2003 between  the  Partnership,
     AEI  Income  &  Growth  Fund XXII Limited  Partnership,  AEI
     Income  &  Growth  Fund  24 LLC, AEI  Real  Estate  Fund  XV
     Limited   Partnership  and  Cypress/GR  Woodlands  I,   L.P.
     relating  to  the  Property at 16778 I-45 South,  Woodlands,
     Texas (incorporated by reference to Exhibit 10.2 of Form  8-
     K filed September 6, 2003).

     10.14      Assignment and Assumption of Lease dated February
     5,  2004  between the Partnership, AEI Net  Lease  Income  &
     Growth  Fund XIX Limited Partnership and Translakewood,  LLC
     relating  to  the  Property  at 14145  West  Colfax  Avenue,
     Lakewood,  Colorado  (incorporated by reference  to  Exhibit
     10.2 of Form 8-K filed February 17, 2004).

     10.15      Fourth  Amendment  to  Purchase  Agreement  dated
     February  17,  2004 between the Partnership and  Texas  Taco
     Cabana,  LP  relating  to the Property  at  7339  San  Pedro
     Avenue,  San  Antonio, Texas (incorporated by  reference  to
     Exhibit 10.2 of Form 8-K filed January 27, 2006).

     10.16      Assignment of Purchase Agreement dated April  22,
     2004  between the Partnership and AEI Fund Management,  Inc.
     relating  to  the  Property at 4296 Kent  Road,  Stow,  Ohio
     (incorporated  by reference to Exhibit 10.1 of  Form  10-QSB
     filed May 11, 2004).

     10.17      Assignment  and Assumption of Lease  dated  April
     30,  2004  between the Partnership, AEI Net Lease  Income  &
     Growth  Fund XIX Limited Partnership and PRECO II  CRIC  LLC
     relating  to  the  Property at 4296 Kent  Road,  Stow,  Ohio
     (incorporated  by reference to Exhibit 10.2 of  Form  10-QSB
     filed May 11, 2004).

     10.18      Assignment and Assumption of Lease dated May  10,
     2004  between the Partnership, AEI Net Lease Income & Growth
     Fund  XIX Limited Partnership and Grant Ave. & Standard Ave.
     Development,  LLC  relating to the  Property  at  157  Grant
     Avenue,  Auburn,  New  York (incorporated  by  reference  to
     Exhibit 10.2 of Form 8-K filed May 14, 2004).

     10.19      Commercial  Purchase  and  Sale  Agreement  dated
     December  16,  2004 between the Partnership, AEI  Net  Lease
     Income  & Growth Fund XIX Limited Partnership, AEI Income  &
     Growth  Fund  23 LLC, AEI Private Net Lease Millennium  Fund
     Limited  Partnership  and  Action Outdoor  Advertising  Inc.
     relating  to  the  Property  at 5970  North  Point  Parkway,
     Alpharetta,  Georgia  incorporated  by  reference to Exhibit
     10.27 of Form 10-KSB filed March 18, 2005).

     10.20      Purchase Agreement dated August 4,  2005  between
     the  Partnership and Young M. Won relating to  the  Property
     at   North   Avenue  and  Wolf  Road,  Northlake,   Illinois
     (incorporated  by  reference to Exhibit  10.1  of  Form  8-K
     filed October 24, 2005).

     10.21      Purchase Agreement dated October 19, 2005 between
     the  Partnership,  AEI Net Lease Income &  Growth  Fund  XIX
     Limited Partnership and KOE LLC relating to the Property  at
     4296  Kent  Road, Stow, Ohio (incorporated by  reference  to
     Exhibit 10.2 of Form 10-QSB filed November 4, 2005).

     10.22      Twelfth  Amendment  to Purchase  Agreement  dated
     December  16,  2005 between the Partnership and  Texas  Taco
     Cabana,  LP  relating  to the Property  at  7339  San  Pedro
     Avenue,  San  Antonio, Texas (incorporated by  reference  to
     Exhibit 10.3 of Form 8-K filed January 27, 2006).

ITEM 13. EXHIBITS.  (Continued)

     31.1  Certification  of Chief Executive Officer  of  General
     Partner  pursuant  to Rule 15d-14(a)(17  CFR  240.15d-14(a))
     and Section 302 of the Sarbanes-Oxley Act of 2002.

     31.2  Certification  of Chief Financial Officer  of  General
     Partner  pursuant  to Rule 15d-14(a)(17  CFR  240.15d-14(a))
     and Section 302 of the Sarbanes-Oxley Act of 2002.

     32    Certification  of Chief Executive  Officer  and  Chief
     Financial  Officer  of General Partner pursuant  to  Section
     906 of the Sarbanes-Oxley Act of 2002.

ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES.

        The  following  is a summary of the fees  billed  to  the
Partnership  by  Boulay, Heutmaker, Zibell  &  Co.  P.L.L.P.  for
professional  services rendered for the years ended December  31,
2005 and 2004:

     Fee Category                            2005       2004

     Audit Fees                           $  12,750   $ 11,995
     Audit-Related Fees                         218        603
     Tax Fees                                     0          0
     All Other Fees                               0          0
                                           ---------   --------
          Total Fees                      $  12,968   $ 12,598
                                           =========   ========

Audit  Fees  - Consists of fees billed for professional  services
rendered  for  the  audit of the Partnership's  annual  financial
statements   and  review  of  the  interim  financial  statements
included  in  quarterly reports, and services that  are  normally
provided   by  Boulay,  Heutmaker,  Zibell  &  Co.  P.L.L.P.   in
connection with statutory and regulatory filings or engagements.

Audit-Related  Fees - Consists of fees billed for  assurance  and
related  services that are reasonably related to the  performance
of  the  audit  or  review of financial statements  and  are  not
reported under "Audit Fees." These services include consultations
concerning financial accounting and reporting standards.

Tax  Fees - Consists of fees billed for professional services for
federal and state tax compliance, tax advice and tax planning.

All Other Fees - Consists of fees for products and services other
than the services reported above.


Policy   for  Preapproval  of  Audit  and  Permissible  Non-Audit
Services of Independent Auditors

        Before  the  Independent  Auditors  are  engaged  by  the
Partnership to render audit or non-audit services, the engagement
is  approved  by  Mr.  Johnson acting as the Partnership's  audit
committee.



                           SIGNATURES

        In  accordance with Section 13 or 15(d) of  the  Exchange
Act, the registrant caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.


                               AEI REAL ESTATE FUND XVIII
                               Limited Partnership
                               By: AEI Fund Management XVIII, Inc.
                                   Its Managing General Partner


March 17, 2006                 By:/s/ Robert P Johnson
                                      Robert P.Johnson, President
                                      and Director
                                      (Principal Executive Officer)


        In accordance with the Exchange Act, this report has been
signed below by the following persons on behalf of the registrant
and in the capacities and on the dates indicated.

        Name                        Title                           Date


/s/Robert P Johnson  President (Principal Executive  Officer)  March 17, 2006
   Robert P.Johnson  and Sole Director of Managing General
                     Partner

/s/Patrick W Keene   Chief Financial Officer  and  Treasurer   March 17, 2006
   Patrick W.Keene   (Principal Accounting Officer)