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Friday, January 30, 2009
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Friday, January 30, 2009
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Friday, January 30, 2009
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Friday, January 30, 2009
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Thursday, January 29, 2009
MORE NEWS
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- Life Insurers' Request For Lower Capital Requirements Denied
- Chubb Quarterly Net Income Falls 37%
- Finacials End Near Session Lows As Obama Rips Wall Street
- Obama Says Bankers' Big Bonuses Are 'shameful'
- Obama Outraged By Large Wall Street Bonuses In '08
- Senate Banking Committee To Seek Moratorium On Foreclosures
Blog List
Retirement
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- Fortis publishes shareholder circular
- Maple Leaf Reforestation Inc. - Disassociation from Future Canada China Environment and its Personnel
- Flagstar Reports 2008 Financial Results and Anticipated Closing of $523 Million Investment
- Saft Groupe SA Reports Fourth Quarter and Full Year 2008 Sales
- Western Alliance Reports Results for the Fourth Quarter 2008
- Harris Associates L.P. reports a shareholding in Adecco S.A. of 4.98%
- MidSouth Bancorp, Inc. Reports Fourth Quarter 2008 Earnings
- Home Bancorp Announces 2008 Fourth Quarter and Annual Results
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Not everyone has the financial ability to own and rent out multiple houses for extra income. And even fewer people want to deal with late night calls from tenants crying about their broken oil burner. Well, thanks to real estate investment trusts, or REITs, you don't have to deal with the stresses of being a landlord to make money off of the real estate market.
A REIT is any entity that pools money from a group of investors to buy different kinds of real estate or real-estate-related assets, such as buildings or mortgages on buildings. It uses the income from rent and loan interest to pay out a steady monthly dividend to its investors.
There are three types of REITs. The most common one is an equity REIT, which simply buys buildings and generates revenue from the rent it charges. Mortgage REITs loan out money to owners of real estate for mortgages or buy existing mortgages to collect interest, which is then paid out to the REIT's investors. Finally, there are hybrid REITs, which are a combination of mortgage and equity REITs.
REITs can be public or private. Public REITs are bought and sold just like stocks and are listed on exchanges, while private REITs can only be bought through direct-participation programs. With private REITs, the investors are actually part owners of the real estate rather than just shareholders of the REIT corporation. They can't sell shares and they typically have to keep their money tied up for eight to 12 years. However, there's the benefit of less volatility since the market can influence public REITs.
One potential drawback to REITs is how they are taxed. While qualifying equity dividends are normally subject to only a maximum of 15%, the dividends from REITs are taxed as regular income, which could be much higher -- depending on how much money you make.