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
The term straight note in real estate is also known as a promissory note. A straight note is defined as a loan agreement that generally requires payments of interest only over the term of ...
One of the parties is unable to satisfy the conditions of the purchase and sale contract. ...
Accumulation of housing units deemed substitutable by homogeneous households, such as those having comparable attractiveness and usefulness. ...
Interior building trim surrounding windows, doors, and baseboards. Interior trim is both decorative and functional. It comes in several different styles and serves to finish the adjoining ...
The term “property title” is relatively common and often used in the real estate industry, which is why it’s useful to know what it really means. While the term itself is ...
Contracts: Awarding a contract to the bidder for the property with the best offer. Lease: To lease property to a lessee. ...
Time interval between buying a real estate investment and selling it. A sound way to determine the return from a real estate investment is over its life. For example, if land was bought on ...
Two or more parties signing a mortgage and sharing a joint financial obligation for the mortgage terms. Under these circumstances, co mortgagors often have a joint property interest and ...
The ability to pay is a self-explanatory term used in Real Estate to determine if the Home Buyer has the financial health to honor a deal. Mortgage Lenders can't afford to lend out money ...
Have a question or comment?
We're here to help.