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
A group of investment bankers underwriting and distributing a new or outstanding issue of securities of a real estate business. a professionally managed limited partnership investing in ...
A cost of funds index that most adjustable rate mortgages written in California in recent years are tied to. Computed by the Federal Home Loan Bank of San Francisco, it reflects the cost ...
Expenditures incurred to improve a specific real estate development; however, these improvements are not directly on the property. Example are curbs, driveways, and streets. ...
Need to know the Ad Litem definition after coming across this weird term? Ad litem is short for “Guardian Ad Litem” or “Attorney Ad litem”, a legal term that ...
Loss of property from nonfulfillment of some duty or condition. In some cases, forfeiture is required by a court order, whereas in other cases the nonfulfillment of a contractual debt is ...
A way to sell and finance property by which the seller keeps title but the buyer takes possession while installment payments are being made. The gain is taxed while the mortgage ...
The right of a landowner to have lateral land support from adjacent properties. The right of lateral and subjacent support means that an adjacent land owner may not, for example, lower or ...
The term after-tax rate of return calculates an investor’s net return after income taxes. The calculation is used by many businesses and investors to determine their real earnings. ...
Shingles having uniform length, but random width. Random shingles give a creative appearance to a roof. ...
Have a question or comment?
We're here to help.