The
very first thing that you should know about REITs is what the letters
stand for. REIT stands for real estate investment trust and these handy
investments started long over one hundred and twenty years ago. This form
of investing was very popular back
then because it allowed for investors
to keep from being taxed twice. This was possible because the special
trust would not be taxed at the corporate level as long as some money was
being passed down to some beneficiaries.
This was great for those who lived
in the 1880's and onward until the 1930's cam a long and spoiled a good
thing. Everything changed then when these types of investments began to be
taxed at the corporate level before any other level like individual
incomes. It took many years to get to where we are today, which is pretty
much back where we were in the 1800's.
It was only after World War II was
over and the real estate market boomed that the president at that time
finally put things right with REITs. So in the year 1960 the REIT
provision went back into affect allowing for this great tax consideration
that lets investors get away with out being double taxed.
In the last twenty or so years REITs
have grown in popularity, mostly due to the loss of many other tax
sheltered investments. With a REIT an investor can invest in high valued
properties with out being filthy rich and they will still get a very good
return on the money they have invested. They will be able to make an
income off of the properties in their portfolios and these shares are even
simple to trade if you need to liquidate some of your assets.
The different perks of REITS have
gown and evolved throughout the 80's and the 90's. Now REITs can manage
all of their properties directly and there are no longer any barriers
where pension funds are concerned. There are now almost 200 publicly
traded REITs in this country and their value is growing by leaps and
bounds each year.
