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
Structures added to framing to increase overall strength and stability. Various types of bracing include cables, rods, struts, ties, shores, additional framing, etc. ...
Reducing real estate investment risk by acquiring diversified holdings. ...
A home seller and a home buyer agreed upon a fair market value and the deal is off to closing the sale. One of the next steps is running a title search. But what is a title ...
(1) The interest rate used to convert future receipts or payments in connection with real estate property to their present value. The cost of capital is used as the discount rate under the ...
Area that is located between a rural and urban area. ...
An interest rate charged on a loan that exceeds the legal maximum interest rate within the state. It is illegal to do so. The maximum interest rate may depend on the type of lender and ...
Federal program in which the U.S. government subsidizes much of the rent paid by low-income people. It applies to rentals of privately owned apartments. ...
What is Novation? What is the definition of novation? Jointly agreeing to provide an equivalent legal obligation or debt for a previous one. Persons to the contract can also be ...
The person named in a deed who acquires ownership. ...
Have a question or comment?
We're here to help.