A Brief Overview About Real Estate Investment Trust?

Categories Real Estate

A real estate investment trust which is more commonly known as the REIT, is a kind of the company whose purpose is to own such real estate properties which can be used for producing income. These real estates are usually commercial properties and include many commercial properties such as the apartments, offices, plazas, shopping centres, warehouses and many more. Real estate investment trust Singapore could either be publicly registered or it could be privately owned. These real estate investment trust have been divided in to two categories. One is called the real estate investment trust equity and the mortgage real estate investment trust.

This REIT is now a distinct asset class and many countries have these enlisted in their investment assets. The concept was first introduced in the United States of America and after its success in the USA, other countries also started to adopt this. Now there are around thirty countries which are following this asset class and more countries which are progressing towards it. This concept enabled people to invest in the real estates more. After some time, the evolution of the REITS started and in that age the mortgage real estate investment trust which are known as the mREITs became more famous and more and more people invested in this. This actually became possible because of the increase in the construction project and land acquiring.

There are different rules and characteristic of the REITs but in order to be qualified as the REIT company in the USA, you need to distribute and divide the 90 percent of the total income on which taxes are applied among the stockholders. Not only this but there are certain other kind of conditions as well. In order for the REIT to be treated as the other corporations, it must be similar to the trust or the association in terms of the structure and therefore, it must be managed by the trustees and the board of the directors. This trust must have the transferable certificates as well as the shares and must not be an insurance or any kind of other financial company. The minimum numbers of the person who co owns the trust must be hundred however it could be more than hundred as well. The one other important clause is that the real estate investment trust cannot have its 50 percent shares held by the five or fewer number of people for the period of the half tax year. Along with these, the 75 percent of the assets must be invested in the real estate investment trust and that the 75 percent of the profit must come from the mortgage.

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