The acronym for a real estate investment trust is a REIT. According to the National Institute of Real Estate Investment Trusts 190 Re Its are currently registered with the SEC and trade on one or more of the New York Stock Exchanges. There are over 900 REITS that are privately held companies.
The advantage to the investor in the REIT is the source of income it provides. Specifically, due to the structure of the REIT it does not accrue corporate tax, instead it returns all of the taxable income to investors. The investor receives a 1099 form for tax purposes and it is therefore taxed like additional income.
The REIT can be designed to fit almost any scenario available in the real property world. It can play the upside and the downside and provide hybrid type coverage. Primarily the REIT is composed of commercial property including shopping malls, apartment complexes and income producing property. It also is packaged with residential real estate of a particular type.
The influence of the REIT has seen increased interests to investors for providing income and a compliment to their portfolio of stocks and bonds. Because of the intricacies of the real estate market and commercial property in particular the investor should consult with a qualified REIT broker or investment advisor. Lists of REITs are available through Morningstar or may be reviewed on-line at the National Institute of Real Estate Investment Trusts.
Troubled waters can be avoided:
The current Summer and Fall 2007 concerns about real estate mortgages and a slow down in some United States real estate markets does not mean the REIT investment is in jeopardy.
There are certain REITS in the United States that are hybrids that afford the investor with security in good times and troubling areas of the market.
