A REIT, Real Estate Investment Trust, is a company that owns, finances, and in
the majority of cases, operates income-producing real estate. They can be publically traded, private, or public but not listed.
The two main types of REITs are 1) Mortgage REITs which deal in investment and ownership of property mortgages. The revenue is generated by the interest that they earn on the mortgage loans. 2) Equity REITs which invest in and own properties. The revenues come mainly from the rents generated from the properties.
Typically REITs must pay out at least 90 percent of their taxable income in dividends to shareholders and the shareholder then pays the income tax on the dividends.
There are many types of commercial real estate owned by REITS. Some examples are hospitals, shopping malls, apartments, office buildings, warehouses, etc. REITs are designed similar to mutual funds which can give the investor all types of regular income streams, diversification and long-term capital appreciation.
If you sustained a financial loss due to your stock broker/financial advisor’s recommendations regarding REITs, call Soreide Law Group for a free consultation with an attorney on how to potentially recover your losses at 888-760-6552.