National Association of Real Estate Investment Trusts (Nareit) Definition:
The National Association of Real Estate Investment Trusts (Nareit) is a trade association that represents the interests of real estate investment trusts (REITs) and publicly traded real estate companies in the United States. Nareit's members own, operate, and finance income-producing real estate, including office buildings, apartments, warehouses, retail centers, healthcare facilities, hotels, and timberlands.
What is the most significant feature of a REIT?
The most significant feature of a REIT is that it is a company that owns, operates, or finances income-producing real estate. REITs are required by law to distribute at least 90% of their taxable income to shareholders in the form of dividends. This makes them an attractive investment for income-seeking investors. REITs can be traded on major stock exchanges, and they are typically less volatile than the stock market as a whole.
What is the difference between trust and REIT? The main difference between a trust and a REIT is that a trust is a legal entity that holds property for the benefit of its beneficiaries, while a REIT is a company that owns, operates, or finances income-producing real estate. Trusts are typically created by will, while REITs are created by incorporation.
What is different about investing in a REIT versus physical forms of real estate? There are several key differences between investing in a REIT and investing in physical forms of real estate. One key difference is that REITs must pay out at least 90% of their taxable income as dividends to shareholders, whereas physical real estate does not have this requirement. This means that REITs are typically more liquid than physical real estate, which can be difficult to sell. Another key difference is that REITs are required to be diversified, meaning they cannot invest more than 5% of their assets in any one property. This diversification requirement helps to reduce risk for investors. Finally, REITs are required to be registered with the SEC, which provides investors with additional protection.
Who pays taxes on a REIT? A REIT is a company that owns, operates, or finances income-producing real estate.
There are several different types of REITs, but the most common type is the equity REIT. An equity REIT owns and operates income-producing real estate, such as office buildings, shopping centers, warehouses, or apartments. The income from an equity REIT comes from the rent that tenants pay to use the property.
A REIT is required to pay out at least 90% of its taxable income to shareholders in the form of dividends. This means that a REIT does not have to pay corporate income tax on the majority of its income.
However, a REIT may be subject to other taxes, such as property taxes, state and local taxes, and federal taxes on unrealized capital gains.
What is the most common type of REIT?
The most common type of REIT is the equity REIT, which owns and operates income-producing real estate. Equity REITs invest in a variety of property types, including office buildings, retail centers, apartments, warehouses, and hotels. Equity REITs are the largest type of REIT, with a market capitalization of $1.3 trillion as of June 2019.