Real Estate Investment Company
Same as term real estate investment trust (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
An individual appointed by a court to manage the affairs and property of a legally incompetent party. The conservator has full decision-making authority over the affairs of the property in ...
Sales commission charged to buy shares in a real estate mutual fund sold by a broker or salesperson. Typically, the fee ranges from about 1 percent to 8 percent of the initial investment. ...
Sponsor of a syndicate involving people or companies buying an interest in a real estate investment or unit. The group of investors are in effect engaged in a joint venture for profit." ...
British thermal unit-a unit of energy associated with the creation of heat. Prior to 1929, it was defined as the amount of heat required to raised the temperature of 1 pound of water 1 ...
Are you planning on buying a house? If you are, you’re going to love the Buyer's Market definition. But if you are a home seller, you will wish that term never comes up again in your ...
Listing of items in priority or sequential order. There may be a succession or series of steps to result in a desired outcome. An example is what logical order should occur in building a ...
When we use the term contingent, we typically imply that something is dependent on another factor. Real estate contingencies make home selling, buying, or even inheriting a property ...
To undertake or take on a responsibility or duty. ...
Danger, hazard, risk, or peril. For example, jeopardizing a piece of property by pledging it as collateral for a loan. ...
Have a question or comment?
We're here to help.