A REIT, or Real Estate Investment Trust, is a company that owns and operates income-producing real estate or real estate related assets. REITs allow individual investors to earn income from commercial real estate ownership without having to purchase properties directly. REITs invest in real estate properties or mortgages/mortgage securities tied to properties, generating income through rent collection or interest payments. To qualify as a REIT, a company must invest at least 75% of its assets in real estate, derive at least 75% of its income from real estate, and pay out at least 90% of its taxable income as dividends.

1. What is a REIT?
•A Real Estate Investment Trust.
•A company that owns and operates income-producing real estate (land and
improvements on it) or real estate-related assets.
- Examples of REITs include hotels, apartments and offices.
•REITs provide a way for individual investors to earn a share of the income
produced through commercial real estate ownership, without actually having
to go out and buy commercial real estate.
•REITs may invest in the properties themselves (generating income through
the collection of rent) or they may invest in mortgages or mortgage securities
tied to the properties (helping to finance the properties and generating
interest income).
- 90% of listed REITs are Equity REITs and the remaining 10% are Mortgage
REITs
Originally a U.S. concept, REITs are now global with nearly 30 countries having
adopted variations of the U.S. REIT model.

2. What qualifies as a REIT?
• After paying a conversion fee, a REIT escapes corporation tax. It must pay
out 90% of its property income to shareholders.
To qualify as a REIT a company must:
• Invest at least 75% of its total assets in real estate.
• Derive at least 75% of its gross income from rents from real property,
interest on mortgages financing real property or from sales of real estate.
• Pay at least 90 % of its taxable income in the form of shareholder
dividends each year.
• Be an entity that is taxable as a corporation.
• Be managed by a board of directors or trustees.
• Have a minimum of 100 shareholders and have no more than 50% of its
shares held by five or fewer individuals

3. References
• http://www.reit.com/reit101/whatisareit.aspx
• http://www.sec.gov/answers/reits.htm
• http://www.bpf.org.uk/en/reita/reits/about_reits.php