REITs offer investors an easy and liquid way to invest in real estate while providing them with a steady stream of income.
Real-estate investment trust started in 1960s and democratized real estate investing, by preventing double taxing (not subject to corporate income tax).
- require 75% of asset must be real estate or cash
- 75% of income has to from real estate
- 90% of income must from real estate, divident, interest, capital gain
- 95% of income must be paid off
- no more than 30% of income can come from property held for less than 4 years
- first boom in 1960s, when interest rate rose above deposit ceiling (better than bank)
- second boom 1986 tax reform eliminated some tax advantages of DPP (direct participator program). No longer allow deliberate depreciation
- 1990s real estate boom