Real Estate Investment – Some Things You Need to Know
The real estate investment vehicle is a little known in U.K. is Real Estate Investment Trust (Reit). In this article, we will discuss the investment method of this property and present some information that you might find useful if you consider investing in the fight.
The first thing to know about Reit is that it is a way for companies to buy real estate investments in such a way that their body income tax reduced or eliminated. Reit is required by law to distribute 90% of their income, the facts that make them very attractive to real estate investors. Reit is similar to mutual funds for stock investment, except that they function with real estate than stock. Because mutual funds are a safer investment than buying individual shares, Reit is a safer investment than buying each real estate property ownership. They are a great way to buy investment property without all risks and expenditures related to direct ownership.
Reit is similar to the company because they can be held publicly or privately. If it is publicly held, Reit can be listed on the public stock exchange in the same way the shares of ordinary shares in the Company are listed. There are 3 types of Reit: equity, mortgages and hybrids. Reits Equity involves ownership and investment in the real nature and income they mainly come from leases charged to this real estate investment. REIT mortgages involve ownership and investment in the property mortgage. Their income comes from the interest they produce on a mortgage loan. Hybrid Reits generate revenue from real estate investment and make mortgage loans.
In the UK, real estate investment in Reit is regulated by the financial law in 2006. Legislation became effective in January 2007. At that time, Reit status was given to 9 property companies in the UK REIT key feature in the UK including followers:
The company must be located in U.K. and must be included in the stock market recognized.
One person or entity cannot have the majority of shares in the company. One person or entity cannot accommodate more than 10% of the shares.
Activities that allow Reit properties must consist of at least 75% of the whole company’s business activities, including income and assets.
Investors must accept at least 95% of the profit of taxability of the REIT net, but Reit must hold the applicable tax.
The reason for investing in Reits
The converted property company to REIT will be substantially beneficial from the exception of taxes and increasing the ability to generate income through the stock market. Investors benefit because they get access to asset class properties that invest with significant dividend returns. Reit also provides good diversification, a must for every serious investor. So, if you want to introduce some diversity into your ownership, consider real estate investment known as Reit in U.K.