Real Estate Investment Trusts
What are they?
(Thread)
What are they?
(Thread)
1/ Introduction
A Real Estate Investment Trust (REIT) is a company that owns, and in most cases operates, income-producing real estate
It offers Investors exposure to the property market without the large initial capital outlay.
A Real Estate Investment Trust (REIT) is a company that owns, and in most cases operates, income-producing real estate
It offers Investors exposure to the property market without the large initial capital outlay.
2/ Structure
Just like Unit Trusts,
REITs mirror the same structure,
it pools the capital of numerous investors together.
Just like Unit Trusts,
REITs mirror the same structure,
it pools the capital of numerous investors together.
2.1/
If you have forgotten what a unit trust is, let me remind you ππ½
If you have forgotten what a unit trust is, let me remind you ππ½
3/ Requirements
To qualify as a REIT:
β’ Must pay at least 75% of taxable earnings out to investors as dividends (distributions)
β’ Must have a committee to monitor risk
β’ Earn income from property leases
To qualify as a REIT:
β’ Must pay at least 75% of taxable earnings out to investors as dividends (distributions)
β’ Must have a committee to monitor risk
β’ Earn income from property leases
4/ Benefits
There are many benefits to investing in REITs:
- Regular income stream
- Tradable stock
- Liquid, unlike physical property
- Special tax considerations
tax is payable by the end investor (thatβs you), so this gives the property company enhanced tax efficiency
There are many benefits to investing in REITs:
- Regular income stream
- Tradable stock
- Liquid, unlike physical property
- Special tax considerations
tax is payable by the end investor (thatβs you), so this gives the property company enhanced tax efficiency
5/ Investors
Because of this pooled capital structure,
it makes it possible for individual investors to earn dividends from real estate investments without having to buy, manage, or finance any properties themselves.
This is important because ππ½
Because of this pooled capital structure,
it makes it possible for individual investors to earn dividends from real estate investments without having to buy, manage, or finance any properties themselves.
This is important because ππ½
5.1/
The costs associated with property are rising, and landlords are battling to pass these costs onto tenants.
This means landlords are effectively subsidizing tenants.
Look for yourself.
The costs associated with property are rising, and landlords are battling to pass these costs onto tenants.
This means landlords are effectively subsidizing tenants.
Look for yourself.
6/ Business model
REITs can own many types of real estate, including:
β’ Commercial offices
β’ Apartment blocks
β’ Warehouses
β’ Shopping centers
β’ Hotels
Each of these come with regulations ππ½
REITs can own many types of real estate, including:
β’ Commercial offices
β’ Apartment blocks
β’ Warehouses
β’ Shopping centers
β’ Hotels
Each of these come with regulations ππ½
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