Why should I purchase a REIT instead of a share in a real estate corporation?
Real estate investment trusts or REITs are entities that enable the flow of income to the unitholder on a tax deferred basis. REITs pay out a significant portion of their distributable income. They appeal to investors interested in receiving a cash return from their investment as opposed to a capital gain. Real estate corporations on the other hand, do not usually distribute their earnings, but re-invest the cash flow into the business. Dividends, in most instances, are insignificant or nil.
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- Why should I purchase a REIT instead of a share in a real estate corporation?
