Real Estate Investment Trusts Overview

A type of investment trust that allows investors to invest in real estate without directly owning property. They are regulated by the Internal Revenue Code and must distribute at least 90% of their taxable income to their shareholders.

REITs can invest in various real estate assets, including equity positions, long-term mortgages, and short-term mortgages.

To qualify as a REIT, a company must have at least 100 shareholders. This ensures that the ownership is sufficiently diversified.

Investors in mortgage REITs are susceptible to risks like loan defaults. This can affect their earnings and even result in losses.

REITs are required to invest more than 90% of their assets in real estate-related assets, including mortgages.

REITs do not qualify for tax-exempt status, but they enjoy tax advantages due to their specific structure.

REITs provide an opportunity to invest in real estate through a more liquid and diversified vehicle compared to directly owning properties.

REITs typically offer dividends to their shareholders, which are generated from the income earned on their real estate investments.

REITs can be either publicly traded or privately held, giving investors different options for investment.

REITs can be specialized in specific types of real estate, such as retail, industrial, or healthcare, providing investors with targeted investment options.

A company that owns or operates income-producing real estate, like apartments or shopping centers. They trade on stock exchanges and must distribute 90% of their taxable income to shareholders as dividends to retain their special tax status.

They are subject to state laws where they are chartered, SEC regulations, and specific rules within the Internal Revenue Code.

REIT shareholders have rights similar to corporate shareholders. They can vote on board members and receive dividend income from the REIT's profits.

REITs must distribute 90% of their taxable income as dividends to shareholders to qualify for their special tax status. These dividends are taxed at the corporate level (REIT level) and again when shareholders receive them.

REIT shareholders elect trustees or directors who have unlimited liability for the REIT's financial obligations.

At least 90% of a REIT's income must come from real estate investments, such as rent or property sales, to qualify as a real estate investment trust.

They are subject to regulations and rules that are designed to protect investors and ensure the financial stability of the REIT.

Share values can fluctuate based on market conditions and the performance of their real estate assets, impacting the overall value of the REIT.

REITs are regulated entities with specific requirements to maintain their tax status. They are unique compared to regular corporations.

REITs provide shareholders with a steady income stream through dividends, similar to how a landlord receives rent.