Equity Trusts
Definition of "Equity trusts"
Same as term REIT: Type of investment company that invests money in mortgages and various types of investment in real estate, in order to earn profits for shareholders. Shareholders receive income from the rents received from the properties and receive capital gains as properties are sold at a profit. REITs have been formed by a number of large financial institutions such as banks and insurance companies. The stocks of many of them are traded on security exchanges, thereby providing investors with a marketable interest in real estate investment portfolio. By law, REITs have to distribute 95 percent of their income to shareholders, and in turn they are exempt from corporate taxes on income or gains. In exchange for this special tax treatment, REITs are subject to numerous qualifications and limitations including:
- Qualified asset and income tests. REITs are required to have at least 75% of their value represented by qualified real estate assets and to earn at least 75% of their income from real estate investments.
- Shareholder qualifications. Generally, REITs are not permitted to be closely held and must have a minimum of 100 shareholders.
Popular Real Estate Terms
Person who will become the beneficiary if the original beneficiary dies before the insured. It is the policyholder's second election as beneficiary, dependent on the status of the primary ...
Legally executed and witnessed document giving another the power to act as one's attorney or agent in handling real estate dealings. The power may be general or specific. The power of ...
Whenever you hear the term “Baby Boomer” it references to someone who was born between 1946 and 1964. The moniker was coined as a way to represent all the people that were born ...
One to whom a gift or bequest is made. ...
Same as term graduated lease: A rental stipulation a varying rental rate. Rental rate are determined tied to periodic appraisals or an inflation or an inflation index. The provision is more ...
Method of appraising real estate based on the market comparison of neighboring properties having similar characteristics. Seeks to answer the question: What would it cost to substitute a ...
Insects that destroy the support wood in the structure of a building. Termite inspection should be periodically performed to detect their existence. If an infestation is confirmed, the ...
Considering future occurrences that may possibly arise. ...
An individual's option to fairly utilize another's property. An example is privileges under an easement. For example, a person receives permission to use a lake on the private property of ...
Have a question or comment?
We're here to help.