By: Tsu-Han (Ina) ChangReal Estate Investment Trust (REIT) is a real estate company, private or public, that has a fixed number of shares which are traded in a secondary market. REIT mainly invests in real estate or real estate mortgages and its shareholders are paid in dividends. In the U.S. REIT are required to distribute approximate 90% of its taxable income in dividends to its shareholders every year.
There are two major categories of REIT; Equity REIT and Mortgage REIT:
Mortgage REIT, makes loans secured by real estate, but they do not actually own or operate the property, reducing risk and liability faced by the firm. However, Equity REIT is different from Mortgage REIT in that it takes ownership of the property, taking on the liabilities associated with the investment. However, it is important to remember that investors only hold shares of the firm, and not shares of the individual investments made by the firm.
What are some of the reasons for investors to think about investing in REITs?
1. Diversification: The properties associated with the REITs are tangible assets so it is considered to be more secure than other publically traded stocks. Therefore, REIT stock prices react differently to the entire stock market in that if the general market is doing poorly, REITs may actually be doing well. Therefore, including shares of REIT in an investment portfolio is a good way to minimize losses in the overall stock market.
2. Dividends: REITs must distribute approximately 90% of their taxable income which allows REITs to avoid corporate tax rates, as well as guarantee the investors or returns on their investments.
3. FFO: Is the measure used to evaluate the performance of REITs, because this measure is based on the operations of the firm, it is considered to be a more accurate measure of the performance of the company.
References:
http://en.wikipedia.org/wiki/Real_estate_investment_trust
http://www.investopedia.com/articles/04/030304.asp
http://www.boston.com/business/markets/articles/2009/04/19/four_reasons_for_looking_into_reits/
My name is Fajar. I live in Bedono in Central Java I was in a very chronic financial issue and terminal health situation some few weeks back. After all my search for assistance from friends and neighbors proved abortive, I feel there was no one who truly cares. I became so exhausted due to lack of funds to expand my business and my 2 kids aged 5 and 8 were also not good looking due to lack of proper care as a result of finance. One faithful morning I saw an old time friend of my late husband and I told him all I have been going through and he said the only way he could help was to direct me to a good loan officer in USA that also helped him, He explained to me on how he was financially down and how he got boosted by this loan officer ( Mr Pedro who grant him 7,000,000.00 USD loan at an affordable rate of 2% rate . He further assured me that they were the only legit loan firm he found online. He gave me their email & That was how I applied and was also granted a loan and my life changed for the good. CONTACT THE ONLY GENUINE LENDER Mr Pedro VIA Email / Whatsapp +18632310632 pedroloanss@gmail.com to resolve your financial mess.
ReplyDelete