Real Estate Investment Trusts (REITs) are an investment fund in which many people invest their money in commercial and residential real estate. Trust manages and owns numerous commercial properties and mortgages. Trust also invests in other types of real estate. Real estate investment funds have the best features of both real estate and equities.
Trust in real estate investments is a company that manages income by producing real estate assets such as apartments, offices, warehouses, shopping malls and hotels. Although there are various types of property, most REITs focus on one type of property. Those who specialize in health facilities are called REITs for health care. Confidence in real estate investments was created in 1960 to allow large-scale investments in real estate, easily accessible to small investors. The main benefit of trust is that it helps a person to choose an appropriate share to invest from various groups rather than investing in a single building or in one direction.
Real estate investment trusts are classified into three categories: equities, mortgages and hybrids. The first category concerns the ownership and management of income properties. REITs offer money directly to homeowners through the purchase of loans or mortgage-backed securities. The third category not only owns properties, but also provides loans to homeowners and property operators.
Real estate investment funds differ from limited partnerships in many ways. One of the main differences lies in the communication of annual tax information to investors and another is the lack of a minimum amount of investment. To become a property investment fund, a company must share 90% or more of its taxable income with its shareholders once a year. Once a company qualifies as a REIT, it is permitted to reduce the dividends distributed to its shareholders.