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
Generic name given for any association of property owners sharing an interest in commonly owned property. Community associations may be developed in condominium, cooperative, or housing ...
The land-to-building ratio is a means to calculate in percentage how much a structure occupies the total land parcel on which it is located. It is the total building area as a percentage of ...
Individual who gives false statements under oath, which is a criminal act punishable by imprisonment and fine. An example is signing a tax return that fraudently understates rental income, ...
Loan such as a mortgage that the borrower has consistently made payments on when due over many years. The borrower has proven his creditor worthiness. ...
Owned by one individual or sole ownership. ...
Affordability is a term used to describe the ability of a person or entity to pay in relation to the income earned by them. Affordability is the comparison of a person's income against ...
The word’s etymology reflects several diverse or seemingly unrelated topics under the same umbrella. As part of everyday discourse, you’ll find the term “omnibus” ...
To understand the definition of the term demised premises, one must understand what demise means. Because demised premises is a widespread use for the term demise. The demised premises ...
Amount the taxpayer gets back when he or she files the tax return at the end of the reporting year because taxes were overpaid for that year. The tax overpayment equals the tax payments ...
Have a question or comment?
We're here to help.