Real Estate Investment Trusts (REITs)
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
Drain facility usually underground for waste and water disposal consisting on connected pipes. ...
Millennials – also known as Generation Y, because they come after the so-called Generation X - is a term coined for a generational extract of people born at the end of the first ...
Rate of return that is necessary to maintain market value of a real estate project. The cost of capital is used for project evaluation purposes. Under the net present value method, the cost ...
Adding a period of time onto another. An examples a mortgagor who successfully restructures his loan by tacking another five years onto the term. ...
A hard white finishing cement with a fast setting time and a high polish capability. Consisting of anhydrous gypsum plaster and an accelerant, alum, Keene's cement is normally applied over ...
Insurance contract providing coverage for risks primarily associated with negligence and acts of omission associated with third-party injuries or property losses. Property and casualty ...
Construction materials from stone, brick, and concrete block. Masonry materials play an important role in providing structural support as well as being used as decorative finish surfaces. ...
Water/plaster mix used as a surface for walls and ceilings. ...
People often ask themselves, what does interim mean? By definition, interim means a break or pause in a particular activity. As an adjective, interim means a temporary, provisional, or ...
Have a question or comment?
We're here to help.