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
Upon satisfaction of a mortgage or other debt payments, the deed releases property, or a portion of it, form the incumbrance. Often it is used in circumstances where a deed of trust is ...
Neighborhood square somewhat resembling a park. It is often owned by town or row house owners situated near the square. ...
One who represents a zone such an elected leader of a region. He or she have dealings with the county's officials in matters affecting that zone. ...
Products, services, markets, and even humans are often subject to swift and unpredictable changes that go against all previous expectations. In other words, they’re volatile. What is ...
Measure of the typical U.S. family's ability to buy a home, published by the National Association of Realtors. When the Index measures 100, a family earning the median income has exactly ...
The escrow fee is basically how the escrow agent or manager get his/her compensation for assisting and handling both the parties and the funds involved in escrow. In real estate, the ...
Map showing the kinds of soil in a designated locality. ...
Increase in the amount of money available for businesses and people to by real estate because of lower interest rates. Easy money stimulates spending on investment such as houses. See also ...
Net return rate earned on an equity investment in real estate after deducing any interest costs and taxes. ...
Have a question or comment?
We're here to help.