What is a Real Estate Investment Trust (REIT)?
A REIT is a company or trust that uses the pooled capital of many investors to purchase and manage a portfolio of real property assets, predominantly in income producing real estate. Such real estate, depending on the mandate of a REIT, could be solely or a combination of retail malls, offices, industrial properties, business parks, or other real estate assets.
Real Estate Investment Trust, or REIT, is a company that either owns and operates or finances income-producing real estate, such as apartment buildings and shopping malls. Created as investment vehicles by Congress in 1960, REITs are designed to offer both institutional and retail investors the chance to invest in large-scale commercial real estate projects.
Real estate is a favorite among some investors. It provides many investment benefits and flexibility not found in other investments. There is one problem, though: it is not a small investment. For most folks, homeownership is the largest and only real estate investment they have. Yet many advisors suggest diversifying one’s portfolio with assets other than stocks and bonds—like real estate. A REIT might be a way to add that diversification.
A REIT (Real Estate Investment Trust) is a more like a corporation or firm that combines capital from many investors related to properties to buy and operate income-producing real estate. They are very clear with policies , rules and regulation like REITs do not pay taxes if certain standards are met also try to remove the concept of double taxation.
A REIT is a corporation that combines capital from many investors to buy and operate income-producing real estate. It gives investors a low cost opportunity to include commercial real estate in an investment portfolio. Also, REITs avoid the “double taxation” treatment of income that would result from an investment in a corporation, because REITs do not pay taxes if certain standards are met, including the distribution of at least 90% of income that would otherwise be taxable. Hence, REITs are focused on generating and distributing income to their shareholders.
Related Questions
- I heard that REIT(real estate investment trust funds) are the way to go, I plan to invest in REIT through Fideletity, and was wondereing which company has the best reit funds I can invest in?
- How is this different than buying property from a real estate agent or buying into a REIT (Real Estate Investment Trust) with a broker?
- Do I need an appraisal license to value the assets of a real estate investment trust (REIT) or a mortgage-backed security?
