Podcast
Questions and Answers
What is a characteristic of real estate investment trusts (REITs)?
What is a characteristic of real estate investment trusts (REITs)?
What is the minimum number of investors needed to form a REIT?
What is the minimum number of investors needed to form a REIT?
What risk do investors in mortgage REITs face?
What risk do investors in mortgage REITs face?
How do REIT assets relate to REIT liabilities?
How do REIT assets relate to REIT liabilities?
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Which type of investments do REITs predominantly include?
Which type of investments do REITs predominantly include?
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What is a key characteristic of limited partnerships compared to REITs?
What is a key characteristic of limited partnerships compared to REITs?
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What is the main focus of investors in real estate investment trusts?
What is the main focus of investors in real estate investment trusts?
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What is the percentage of income that must come from real estate investments for a REIT to qualify?
What is the percentage of income that must come from real estate investments for a REIT to qualify?
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What happens to cash distributions from REITs?
What happens to cash distributions from REITs?
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Who do REIT shareholders elect?
Who do REIT shareholders elect?
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What must REITs distribute to retain their status under the Internal Revenue Code?
What must REITs distribute to retain their status under the Internal Revenue Code?
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How are shares of REITs typically traded?
How are shares of REITs typically traded?
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Which of the following is NOT a right of REIT shareholders?
Which of the following is NOT a right of REIT shareholders?
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REITs are subject to which of the following?
REITs are subject to which of the following?
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What is a potential obligation of REIT trustees or directors?
What is a potential obligation of REIT trustees or directors?
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Study Notes
Real Estate Investment Trusts (REITs)
- REITs use the corporate form of ownership.
- REITs primarily invest in real estate and/or mortgage notes.
- REITs are less liquid than limited partnerships.
- REITs are not considered active investments under the Internal Revenue Code.
- REITs can be formed for investing in real estate equity, long-term mortgages, and short-term mortgages.
- A REIT must have at least 100 investors.
- Mortgage REIT investors face risk of decreased earnings due to loan defaults, decreased dividends due to low occupancy, and reduced operating performance due to rent controls.
- REIT assets typically exceed REIT liabilities.
- REIT assets are primarily invested in real estate equities and mortgage-backed securities, and include development and construction loans.
- To qualify for tax-exempt status, REITs do not require specific percentages of rent or income from real estate to maintain their status.
- REIT cash distributions are subject to double taxation.
- REIT share values are often easily known, unlike some other assets.
- REITs are subject to state laws, SEC regulations, and Internal Revenue Code.
- REIT shareholders have rights similar to corporate shareholders.
- REIT shareholders cannot offset REIT operating losses against their personal income.
- To be a qualified REIT, at least 90% of gross income must come from real estate investments.
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Description
Dive into the world of Real Estate Investment Trusts (REITs) and understand their structure, investment strategies, and tax implications. This quiz will explore key characteristics of REITs, including their liquidity and risk factors. Test your knowledge on how REITs operate and their role in real estate investment.
