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Real Estate Investment Trust

Updated on November 16, 2015

REIT

Developed by the United States Congress Real Estate Investment Trusts were made to provide a property investment arrangement similar to the construction mutual funds give for investment. Congress determined a method for the normal typical investors to put money into commercial properties that were large scale was the same manner they invest in other industries -- through the purchase.

REITs possess many varieties of commercial property, including apartment and office buildings to resorts, hospitals, shopping centers, warehouses and timberlands. Some REITs also engage in financing property through loans or mortgages. Contrary to other property firms, a Real Estate Investment Trust will not develop property properties so that you can resell them. Instead, a REIT purchases and develops properties mainly in order to manage other real estate as a section of the realestate own investment portfolio.

REITs offer investors with an extremely fluid position in property. Investors generally supply high dividend yields and do receive special tax concerns. As investment vehicles for real estate REITs offer both large and little investors of kinds different advantages for example routine income flows, portfolio diversification, sound long term capital appreciation and transparency, dependable and powerful dividends, and liquidity.

All REITs must don't have any less than one hundred investors, no 5 can hold 50% of shares over. Law requires real Estate Investment Trusts to carry on dividend payout ratios of no less than making them a favorite for income. These dividends may be deducted by REITs and avoid all tax liabilities or the bulk, although net income tax is still paid by investors on the payouts. (dividend reinvestment strategies), enabling yields to compound with time.

Mortgage REITs invest mainly in mortgages, mortgage securities tied to associated with property, residential and commercial properties along with on other debt products. In addition, there are public non-listed REITs - which could be filed together with the SEC but are not freely traded - as well. REIT-owned properties are situated in every state and support several million U.S. occupations per annum. US- REIT legislation has been enacted by now over 30 states all across the world, and REITs have eventually become a model all over the world.

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