Types of REITs
There are two basic categories of REITs: equity REITs and mortgage REITs.
An equity REIT is a publicly traded company that, as its principal business, buys, manages, renovates, maintains, and occasionally sells real estate properties. Many are also able to develop new properties when the economics are favorable. It is tax advantaged in that it is not taxed on its income and, by law, must pay out at least 90 percent of its net income as dividends to its investors.
A mortgage REIT is a REIT that makes and holds loans and other debt instruments that are secured by real estate collateral.
The focus of this book is equity REITs rather than mortgage REITs. Although mortgage REITs have higher dividend yields and can, at times, deliver ...
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