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Real Estate Investment Trust (REIT)
A Real Estate Investment Trust (REIT) is a company that owns, operates, or finances income-producing real estate. REITs are structured to allow individual investors to earn a share of the income produced through commercial real estate ownership without having to purchase, manage, or finance property themselves.
REITs are often modeled after mutual funds; they pool capital from many investors to buy, develop, and manage a portfolio of properties or real estate loans. Most REITs are publicly traded on major stock exchanges, making them a liquid and accessible way to invest in real estate.
Key Features and Requirements
To qualify as a REIT and receive preferential tax treatment (avoiding corporate tax), a company must meet several specific requirements:
