What Is A REIT?

REIT's are given a special tax designation that reduces or eliminates corporate income taxes. In return for this special tax designation, REIT's are required to distribute 90% of their income, which will be taxable in the hands of the investors.

Like other corporations, REITs can be publicly or privately held. Public REITs may be listed on public stock exchanges like shares of common stock in other firms.

REITs can be classified as equity, mortgage or hybrid. REIT's generates income through renting, leasing and selling of property and distributes it directly to the REIT holder on a regular basis.