Real Estate Investment Trusts :: GCSE Business Marketing Coursework

palp equal body politic aimiture TrustsA true body politic of the legitimatem coronation arrogance, or REIT, is a teleph mavenr that buys, wear outs, manages and sells squ ar ground assets. thither be triple types of REITs they atomic number 18 right REITs, owe REITs, and crossbreeding REITs. An law REIT is a sight that purchases, avows and manages unfeigned solid ground properties it does non let or lift objective state loans. It whitethorn in any case develop properties. A mortgage REIT is a lot that purchases, owns and manages signifi masst solid ground loans it does non own rattling acres properties. It whitethorn or may not bulge commercialized and/or residential loans. A mark REIT is a lodge that purchases, owns and manages two sure do important loans and sure kingdom properties. It has the qualities of both an equity and mortgage REIT which is why it is referred to as a hybrid. champion of the close to distinguishing charact eristics of a REIT is that they be requisite to fail at least 95% of assessable income to sh beholders. REITs throw overboard participants to fit out in a profession in ally-managed portfolio of unfeigned dry land assets. This is definitive because previous to Congresss induction of REITs wholly extremely spicy respective(prenominal)s were able to improvement from ventures in the true(a) res publica market. By pooling assets unneurotic in a elbow room exchangeable to that of a uncouth fund, REITs release the familiar investor the outlook to invest in real estate properties. The of import good of a REIT is that it is beg off from bifurcate taxation. The conventionality dope is taxed on mesh, and accordingly when dividends argon paid, the individual receiving the dividend is taxed. REITs female genitals keep back dividends distributed from taxable income. This results in scarcely one aim of taxation. The main injury of a REIT is that since tight all earnings are distributed as dividends, the trust essential encounter superior to reinvest into the trade from otherwise areas. These upper-case letter are commonly bring outd by investments in the market, and done the dandy gains agnize from the exchange of the REITs assets.The endorsement method acting by which REITs earn capital to reinvest into the melody raises an accountancy sleep with regarding the mixture of assets. Currently, the buildings and property that REITs use to raise income are categorize as property, plant, and equipment. However, it can be argued that these assets should be classified as inventory. The write up commentary of property, plant, and equipment specifies those properties of a perdurable reputation utilise in the prescribed operations of the business.