Real Estate Investment Trust (REIT)

The real estate investment trust, or REIT, is a special form of U.S. corporation with special, favorable tax treatment. As long as the corporation remains primarily engaged in real estate property management, and as long as it pays substantially all its income out to shareholders in the form of dividends, the REIT’s profits are not subject to income tax.

This provides a big tax advantage to the shareholder, since the REIT’s profits are only taxed once, at the personal level, instead of twice, as most dividends are.

Benefits

REITs can be an attractive way to invest in income real estate, without having to deal with the headaches of property management. Many REITs are publicly traded on stock exchanges, and thus offer liquidity that does not exist when investing directly in real estate.

Risks:

REITs are subject to the same risks as real estate investments, including interest rate fluctuations, high leverage, exposure to declining rents, etc.

Who to Contact:

Alliance Partnership Services – Matches buyers and sellers of non-listed REIT and partnership interest units.

Investment managers: List your offering free