Complete Guide To Investment Companies, Funds And REITs

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Real Estate Investment Trusts (REITs) - Equity And Mortgage REITs

Equity REITs
Equity REITs invest in and own properties (thus responsible for the equity or value of their real estate assets). Their revenues come principally from their properties' rents. Most REITs focus on the "hard asset" business of real estate operations. When you read about REITs, you are usually reading about equity REITs. Equity REITs tend to specialize in owning certain building types such as apartments, regional malls, office buildings or lodging facilities. Some are diversified and some are specialized, meaning they defy classification - such as, for example, a REIT that owns golf courses.

Mortgage REITs
Mortgage REITs deal in investment and ownership of property mortgages. These REITs loan money for mortgages to owners of real estate, or purchase existing mortgages or mortgage-backed securities. Their revenues are generated primarily by the interest that they earn on the mortgage loans. Fewer than 10% of REITs are mortgage REITs; these REITs make loans secured by real estate, but they do not generally own or operate real estate.



Hybrid And Retail REITs


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RELATED TERMS
  1. Real Estate Investment Trust - ...

    A REIT is a type of security that invests in real estate through ...
  2. REIT ETF

    Exchange-traded funds that invest the majority of assets in equity ...
  3. Funds From Operations Per Share ...

    A metric for the performance of a real estate investment trust ...
  4. Captive Real Estate Investment ...

    A real estate investment trust (REIT) that is controlled by a ...
  5. Funds Available For Distribution ...

    An informal measure of the amount of capital that is on hand ...
  6. Finite-Life REIT - FREIT

    A real estate investment trust (REIT) that aims to sell its real ...
RELATED FAQS
  1. What is the difference between an Equity REIT and a Mortgage REIT?

    Find out more about real estate investment trusts and the main differences between equity and mortgage real estate investment ... Read Answer >>
  2. What is the difference between a REIT and a real estate fund?

    A real estate fund invests in securities offered by public real estate properties directly or indirectly through Real Estate ... Read Answer >>
  3. What are the pros and cons of owning an equity REIT versus a mortgage REIT? (AEC, ...

    Learn about investing in equity, mortgage and hybrid REITs. Explore the different strategies REITs employ to generate income ... Read Answer >>
  4. What are the potential pitfalls of owning REITs?

    Learn about pitfalls to investing in REITs, such as investors having to pay income tax, the REIT having to pay property tax ... Read Answer >>
  5. Can mutual funds invest in REITs?

    Learn about mutual funds that invest in real estate investment trusts and have their shares traded on major U.S. stock exchanges ... Read Answer >>
  6. Is NAV the best way to assess the value of an REIT?

    Examine and understand the usefulness of net asset value as an accurate metric with which to assess the value of a REIT investment. Read Answer >>

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