Making investments in real estate can happen in many ways. These methods include buying residential rental properties, house flipping, purchasing commercial real estate, and putting it out for rent. Did you know there’s a better way to invest in real estate? That’s what we’re here to inform you. Real Estate Investment Trusts or REITS are the best strategies for investing in real estate. But like every worthy investment, you need legal backing. If you’re looking for “estate lawyers near me,” you’re in luck because Arturo R. Alfonso, P.A., has the best lawyers in Miami. Learn more about the basics of REITS as you read on.
What Are REITS?
Real Estate Investment Trusts or REITS are a great alternative to investing in real estate. Although it is not well known, it is an investment strategy with great potential for success. This real estate trust is designed based on mutual funds and allows investors to invest their money in real estate investments. When investors want to buy shares in a Real Estate Investment Trust, they buy the shares in a real estate portfolio. Sometimes, REITS are peculiar to a sector or field. For instance, REITS can include various properties in the energy sector or healthcare sector.
The Organizational Structure Of REITS
A real estate investment trust is under the leadership of a trustee or board of directors who lease the portfolio of REIT properties to tenants, gather the income and share the profits in the form of dividends to stakeholders. The well-known type of REIT is Equity REIT, but some REITS are known as Mortgage REITS. It is a means of financing real estate rather than owning real estate. Mortgage REITS investors receive payment using interest gotten on the loans. To better understand REITS mortgages, it’s essential to get a trusted real estate attorney to put you through. You will find “estate lawyers near me” to make the process easier.
Requirements for REITS
REITS date back to the 1960s. But today, real estate investment trusts are governed under complex laws like those in the internal revenue code. Some of these laws fall into three different categories:
- The Asset Requirement: It assures that REITS assets are peculiar to the real estate unit. 75% of the value of assets that REIT owns must have real estate holdings, treasury bonds, or cash.
- The Income Requirement: REIT must get 75% of gross income from sources related to real estate.
- The Distribution Requirement: REIT distributes 90% of yearly taxable income generated in the form of shareholder’s dividends.
These requirements are for many reasons. They put thresholds in place for REITS to help possible investors point out fraudulent investment trusts before investing. To that effect, REIT investors must approve a REIT before investing.
The legal procedures for REITS sometimes are complicated. If you have problems related to REITS but are not limited to fraud issues, it’s vital to consult an attorney. You don’t need to search for “estate lawyers near me” anymore because we are available for you. Arturo R. Alfonso, P.A., has attorneys with years of experience helping clients with real estate issues. Call us today for an appointment with our Miami lawyers.