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
Form of financing that replaces or "takes-out" a construction loan to a developer. The take-out loan is a permanent mortgage loan which replaces the construction loan when, commonly, the ...
Payment made by the tenant to the landlord for the right to use property, such as an apartment or office. ...
Zoning a portion of land in a given area for different purposes than its surrounding functions. For example, a locality may decide to spot zone a vacant lot in a residential area for ...
Ability of a large group of retail stores or shopping center to take business away from other smaller or more distant shopping stores. ...
Construction method where reinforced concrete is used with concrete block and mortar to form an extremely strong building. Reinforced concrete construction is often used in conjunction ...
Contractual provision describing the terms under which coverage may be terminated. An insured or insurer may cancel a policy before its expiration date. Generally, a written notice of ...
Income reporting to the Internal Revenue Service using form 1099 stating income earned. For example, An employing real estate broker uses form 1099 to report commissions earned by a real ...
In real estate terms, many consider having corner influence an extra financial advantage when it comes to transactions in most cases. Usually, enjoying a corner influence brings an ...
Same as term Veterans Administration Mortgage: Mortgage guaranteed up to 30 years by the Veterans Administration to veterans meeting minimum requirements. Originally established by the ...
Have a question or comment?
We're here to help.