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
Conifer wood, such as pine and redwood. ...
The time period a real estate investment is held. The return is tied to the time period of the investment. The period is used for income tax purpose to determine whether a profit earned or ...
Defect in the tax law that either may provide a loophole to minimize the tax payment or result in higher taxes than there should be. ...
The process of changing, updating, and altering the appearance and structural characteristics of a building. For example, John remodels the kitchen in his home by replacing the cabinets, ...
Limited partnership in which limited partners rely on the general partner to choose specific properties after the funds are available. ...
Claude in a contract, title, or mortgage that is subject to being annulled, repealed, or revoked upon the satisfaction of a claim or completion of a future event. ...
person's behavior partly genetic and partly learned through experience over time. Some people have good personal traits while others have poor ones. ...
Same as term government rectangular survey: Way in which the U.S. government uses to subdivide public land. Land is designated as either a base line (East-West) or principal meridian line ...
Initial user of real estate property, such as the first tenant in a newly constructed apartment building or office building ...
Have a question or comment?
We're here to help.