What REIT Means And How You Can Make Big Bucks With It!

By: Taro Chellaram /Real Estate Articles/Feb 01, 2022

What REIT Means And How You Can Make Big Bucks With It!

What if you were told that you could earn regular dividends from your investments without the hassles relating to buying, managing or even financing a property? Sounds too good to be true, right? Well, that’s precisely what a REIT allows. A REIT, or real estate investment trust, is a company that owns multiple income-earning real estate. It enables individual investors to buy shares of the REIT and add to their investment portfolio.

The History of REIT

Before we dive into its benefits, let’s take a look at how REITs came into play in the United States. REIT was a part of the Cigar Excise Tax Extension of 1960 implemented by President Eisenhower to allow for an affordable platform for the public to be able to invest in income-making real estate. According to Forbes, these are the prerequisites a company must meet to qualify as a REIT

  • Invest at least 75% of total assets in real estate.
  • Derive at least 75% of its gross income from rents from real property, interest on mortgages financing real property, or real estate sales.
  • Pay at least 90% of taxable income as shareholder dividends each year.
  • Have a minimum of 100 shareholders.
  • Have no more than 50% of its shares held by five or fewer individuals.

Benefits of REIT Investment?

The biggest USP of investing in REITs is probably the fact that they offer a lower risk for investors looking to enter the real estate market but don’t want to burden themselves with the inconvenience of managing a property. Since 90% of the taxable income goes to its shareholders, individuals investing in REITs earn high dividends. 

Despite the ongoing pandemic, 2021 turned out to be a spectacular year for investors. Retail strip centers went up by 65% while the mall REIT index was up by 95%. That’s not all, the FTSE Nareit All Equity REITs index saw a return of 41.3%. Experts expect this significant improvement to be an ongoing occurrence in the real estate investment market, owing to the expected economic growth, higher incomes and extended spending/purchasing power across the country.

How increase in interest rates will affect the real estate market in 2022

2022 has proven to be a pivotal year for the housing and real estate market. With the ongoing Ukraine war on one side, and the rising interest rates on the other, the housing market is seeing a shift from the post-Covid boost.

Transforming Houston: Council Greenlights Progressive Changes for Affordable Housing and Pedestrian

Revolutionizing Houston\'s Housing Landscape: City Council Approves Sweeping Changes for Affordable Housing and Pedestrian Safety

Legal Victories Unleash Potential to Cut Property Taxes - Impact on Hospitality and more

Landmark Court Decisions Pave the Way for Lower Property Taxes and Intangible Asset Considerations

Reviving Campus Spaces: Adaptive Reuse Solutions for Modern Education

Transformative Real Estate: Navigating the Evolution of College Campuses through Adaptive Reuse and Strategic Solutions

Short term rentals are declining but you can still make money with the right kind of investment

There are still opportunities to earn money from short-term rentals, despite the ongoing decline. strategic investments and a proactive approach can lead to success in the evolving short-term rental industry.

2023 Market Predictions in Commercial Real Estate

2023 commercial real estate predictions are here. Find out which is the best investment opportunities are best for you. Make money with commercial real estate.

The Ultimate List of Real Estate Terms

We have compiled a list of top real estate words you need to know whether you are a real estate agent or are looking to buy a house or buy a commercial property. This is the real estate lingo you should know.

Tesla moves to Texas - Impact on real estate and economy

2021 was a big year for real estate in many ways, but the biggest news of the year came towards the end of it when billionaire magnate, Elon Musk announced his move from California to Texas.

Not All Industrial Real Estate Is The Same

Industrial real estate includes manufacturing, logistics, and flex or R&D buildings. Find out which of these real estate investments is the most profitable for you.

Industrial development on the rise in Texas real estate 2023

Texas has become a place of choice for businesses because of its growing population. This growth has led to increased demand for commercial real estate development, specifically industrial development. This rise is set to continue until the end of 23


@ tcgcrealestate

Subscribe Now! IT's Free

Stay up to date with all news coming straight in your mailbox.

Copyright © 2024 TC Global Commercial. All rights reserved.