REIT
Real Estate Investment Trust, or REIT, is a legal entity that invests in different kinds of real estate or real estate related assets -- e.g., shopping centers, office buildings, hotels, and mortgages secured by real estate. There are basically three categories of REIT:
- Equity REIT -- This is the most common type of REITs. Equity REITs invest in or own real estate and make money for investors from the rents they collect;
- Mortgage REIT -- This type of REITs lends money to owners and developers or invest in financial instruments secured by mortgages on real estate; and
- Hybrid REIT -- This type of REITs is a combination of Equity REIT and Mortgage REIT.
There are a number of conditions a company must meet to qualify as a REIT. According to the Internal Revenue Code, the company must:
- Pay 90% of its taxable income to shareholders every year,
- Invest at least 75% of its total assets in real estate, and
- Generate 75% or more of its gross income from investments in or mortgages on real property.
For more information, please visit U.S. Securities and Exchange Commission, Real Estate Investment Trusts web page.
Recent articles about REIT
Should You Invest In Target Retirement Funds?
My company made Vanguard Target Retirement Funds available for our 401k accounts about two years ago. However, I have not used them preferring to manually manage my own portfolio using tradition funds that include bond, large-cap, small-cap, international stock, and REIT funds. However, Target Retirement Funds are not without merits, but first let me give [...]
With the current housing market meltdown, it’s hard to think about investing in real estate. Moreover, the current tight credit market and lack of cash makes it even harder to buy an investment property even if you want to. This is where REIT comes in. Personally, I think it’s an attractive investment [...]
Everything You Ever Wanted To Know About Asset Allocation
Asset allocation is an investing a strategy for maximizing gains while minimizing risks in your investment portfolio. It involves diversifying your assets among different broad categories of investments, such as equity, fixed income, and money market, etc. By reducing your investment risks, you’re in a better position to meet your financial goals.
How Asset Allocation [...]
Ask The Expert with Larry Swedroe, April 2008 Issue
This is the 5th issue of the Ask The Expert column by Larry Swedroe. You can see Larry’s full biography and important disclaimer below. If you are interested in having your question answered by Larry, please send me an email via the contact page.
Now, let’s get to the questions and answers (please note that the [...]
Investing in real estate, specifically small rental properties where I’d buy single-family or multi-family houses for the purpose of renting them out has been one of the things I wanted to do. However, the three musketeers of fear, doubt, and uncertainty discouraged me from taking any action toward residential real estate investing. So far, the [...]
Ask The Expert with Larry Swedroe, March 2008 Issue
This is the 4th issue of the Ask The Expert column by Larry Swedroe. You can see Larry’s full biography and important disclaimer below. If you are interested in having your question answered by Larry, please send me an email via the contact page.
Now, let’s get to the questions and answers (please note that the [...]
Ask The Expert with Larry Swedroe, February 2008 Issue
This is the 3rd issue of the Ask The Expert column by Larry Swedroe. You can see Larry’s full biography and important disclaimer below. If you are interested in having your question answered by Larry, please send me an email via the contact page.
Now, let’s get to the questions and answers (please note that the [...]
I think many of us heard about income streams, active income, passive income, and portfolio income before (if not, I have brief description of each below). I’d like to share some quick observations about active versus passive income as it relates to financial independence and wealth.
The image above is a simplification that shows active [...]
In the previous lesson with my wife, I taught her about various investment vehicles available at our disposal. This time we discussed choosing the right tool for the job; that is, choosing the best investment option available for various savings goals.
Photo from morgueFile
Common Savings Goals
First, we reviewed some of the more common savings goals. I [...]
I just got hammered by a mutual fund double whammy. Since I bought my SSgA Tuckerman Active REIT (SSREX), it lost nearly 6%, then the fund distributed $2.9418 per share last Friday. The end result? The fund is now down almost 20% and I will have to pay capital gains tax on [...]
