Understanding Mortgage REITs

Published on Dec 14, 2016
Mortgage REITs provide financing for real estate by purchasing or originating mortgages and mortgage-backed securities and earning income from the interest on these investments.

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REITs Everywhere, Everyday (2015)

Published on Mar 4, 2015
For more than 50 years, REITs have made it possible for Americans from all walks of life to invest in income-producing real estate. REITs own and finance a diverse array of property types in all 50 states as well as many countries across the globe. REITs own more than $1 trillion of real estate in the U.S. and help support nearly 1 million jobs each year through their own operations and use of their facilities. And nearly 50 million Americans invest in REITs through their 401(k) plans. In fact, you probably encounter REITs through the real estate they own and finance in a variety of ways every day.

In this educational video, a family realizes how many ways they interact with REIT-owned properties in a given day.

To learn more visit: https://www.reit.com/

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What is a REIT?

Published on Jan 11, 2013
http://www.reit.com REITs today are more vital to the economy and the investment landscape than ever before — fulfilling their essential role of providing each and every individual with the opportunity to benefit from large, diversified holdings of real estate.

Since their inception, REITs have helped the U.S. achieve important economic and social goals. When Congress created in 1960, it aimed to provide the average person with the ability to easily and effectively access investment in real estate to help secure a better future.

With U.S. REITs leading the way around the world, REIT-based real estate investment today is a well-accepted and widely recognized part of the investment landscape, bringing with it the benefits of current income and capital appreciation through long-term real estate investment.

As a result, savers, investors and retirees increasingly find the REIT approach to real estate investment playing a vital role in their investment and retirement planning, helping to advance our nation’s economic security.

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INVESTING in REITs For Dummies

Published on Oct 26, 2014
Learn about Investing in REITs for Dummies. REITs (Real Estate Investment Trusts), which are amazing investments, are explained here. They are easy to buy and they trade like stocks. See how REITs can make money in two ways; Capital Appreciation and Dividends. Why you should invest in this specialized “stock”. Diversification, Liquidity, Dividends and Performance are all covered. REITs have outperformed the S&P500, the Dow Jones Industrials, and the NASDAQ for decades. This is the most wildly popular investment you’ve never heard about. Over 200 REITs are traded on the New York Stock Exchange. No investment advice is given here, This is a tutorial video. Learn all about REITs and what makes them a great investment. For beginners and investors who are new to REITs. Learn the details about these liquid investments.

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REIT Basics

Published on Jun 14, 2016

Think real estate investing takes a lot of money? Think again. REITs (Real Estate Investing Trusts) make real estate investing as simple as buying a stock. Let Instructor David Settle teach you how REITs work in this short video. This video is part of the Investools Income Investing course.

Try this course for free at https://investools.com.

Check out these videos from the Income Investing course:
Meet the Dividend Aristocrats https://youtu.be/AwwDTGum8f0
The Historical Returns of Income-Producing Investments https://youtu.be/5NdwE98PUk0

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How Do REITs Work?

Published on Mar 26, 2014

REITs, or real estate investment trusts, were created by Congress in 1960 to give all individuals the opportunity to benefit from investing in income-producing real estate. REITs allow anyone to own or finance properties the same way they invest in
other industries, through the purchase of stock. In the same way shareholders benefit by owning stocks in other corporations, the stockholders of a REIT earn a share of the income produced through real estate investment, without actually having to go
out and buy or finance property.

This video provides some insight into what REITs are and how they work. The REIT industry has a diverse profile, which offers many benefits. REITs often are classified in one of two categories: Equity REITs or Mortgage REITs. Equity REITs own a wide range of property types including offices, shopping centers, hotels, apartments and much more. Equity REITs derive most of their revenue from rent on those properties.

Mortgage REITs may finance both residential and commercial properties. Mortgage REITs get most of their revenue from interest earned on their investments in mortgages or mortgage backed securities.

In addition, REITs may be publicly registered with the SEC and have their shares listed and traded on major stock exchanges, or they may be publicly registered with the SEC but not have their shares listed or traded on major stock exchanges, or they may be private companies (not registered with the SEC and not having their shares listed or traded on a stock exchange.

Regardless of the type, REITs operate under a specific set of rules established by Congress. A REIT is an entity that:
• is modeled after mutual funds
• is treated by the Internal Revenue Code as a corporation
• must be widely held by shareholders
• must primarily own or finance real estate, and
• must own its real estate with a longterm investment horizon.

The IRS implements the REIT rules and oversees what qualifies as a REIT. The Internal Revenue Code requires a REIT to adhere to the following essential rules: at least 75 percent of the corporation’s income must be earned from real estate as rent, real estate interest or from the sales of real estate assets; at least 75 percent of the corporation’s assets must be real estate assets; and, at least 95 percent of income must be passive.

REITs are required to distribute at least 90 percent of taxable income annually to shareholders as taxable dividends. In other words, a REIT cannot retain its earnings. Like a mutual fund, a REIT receives a dividends-paid deduction so no tax is paid at the entity level if 100 percent of income is distributed. REIT shareholders pay taxes on dividends at ordinary rates versus the lower qualified rate.

Over time, REITs and the rules and regulations that govern them have evolved to meet the changing needs of the real estate industry and the broader economy. But throughout that process, REITs have remained true to the mission laid out by Congress in 1960: to make the benefits of income-producing real estate accessible to anyone and everyone. And that’s still how they work today.
By Mitch Irzinski

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