Real Estate Investment Trusts, or REITs, is a company or Trust that uses the pooled capital of many investors to invest in and manage a portfolio of real estate property and mortgage. They traded publicly, such as stocks, and offers the benefits of direct ownership of real estate without owning real estate.
To qualify as a REIT, a company must distribute at least 90% of taxable income to shareholders each year. (Many are paying 100% of their income.) Like REITs cut dividends paid to shareholders, they don’t have to pay the company, federal, or state income tax; On the contrary, responsibility was passed on to shareholders.
Have no more than 50% of its shares are held by five or fewer individuals during the latter half of every tax year
Have no more than 20% of assets consisting of shares in the company’s taxable REIT
With the volatility that has swept our markets in the second half of 2011, I and my clients have found stability in the often significant dividend offered by REITs. Quarterly dividend payments, or sometimes monthly basis this has proven to be a consistent good hedge against more s investment, aggressive.