Real Estate Investment Company
Same as term real estate investment trust (REIT): Type of investment company that invests money in mortgages and various types of investment in real estate, in order to earn profits for shareholders. Shareholders receive income from the rents received from the properties and receive capital gains as properties are sold at a profit. REITs have been formed by a number of large financial institutions such as banks and insurance companies. The stocks of many of them are traded on security exchanges, thereby providing investors with a marketable interest in real estate investment portfolio. By law, REITs have to distribute 95 percent of their income to shareholders, and in turn they are exempt from corporate taxes on income or gains. In exchange for this special tax treatment, REITs are subject to numerous qualifications and limitations including:
- Qualified asset and income tests. REITs are required to have at least 75% of their value represented by qualified real estate assets and to earn at least 75% of their income from real estate investments.
- Shareholder qualifications. Generally, REITs are not permitted to be closely held and must have a minimum of 100 shareholders.
Popular Real Estate Terms
Linkage in real estate means the proximity of a particular piece of land to its originally intended function. In addition, linkage can refer to the time and distance between a ...
Mortgagor's signed statement that the stated remaining balance of a mortgage is correct and it is a property lien. This prevents a mortgagor from later stating the facts were ...
Decision rendered by a court of law. ...
Same as term lateral support: The right of a landowner to have lateral land support from adjacent properties. The right of lateral and subjacent support means that an adjacent land owner ...
The right to allow livestock to graze on a certain range or grazing lands. Grazing rights can be obtained through a lease or by contractual agreement stipulating the period of time and the ...
Income for investors arising from net long-term profits of a real estate mutual fund realized when the portfolio is sold at a gain. Fund managers pass on profits from sales of real estate ...
Insurance protection for the replacement cost of damaged property. Thus, the accumulated depreciation is not subtracted in determining the amount of reimbursement. ...
An arm’s-length transaction is a business deal, or transaction where the seller and buyer act independently of each other without influence on the other party. What sets these types ...
Putting a waterproofing substance on the exterior cement walls of the structure to prevent water from entering the interior of structure. The cracks in the walls are patched up. ...
Have a question or comment?
We're here to help.