Real Estate Investment Trust (REIT)

Definition

A company that owns income-generating properties and distributes 90% of its taxable income to shareholders, essentially a lazy person's real estate portfolio.

Example Usage

We diversified our portfolio by adding a commercial REIT that focuses on logistics warehouses.

Source: Real estate and securities law

Related Terms

Advanced

boot

Additional cash or property value included in a 1031 exchange to equalize the values being swapped, which unfortunately becomes taxable income. Named perfectly for something that kicks you right in the tax deferral strategy.

🏠 Real Estate

Advanced

income approach

A property valuation method based on the income stream it generates, using capitalization rates to convert annual income into present value. It's how commercial properties are valued, where buildings are essentially money-printing machines worth whatever those dollars command.

🏠 Real Estate

Advanced

tax increment financing

A public financing method using future property tax increases from development to fund current infrastructure improvements. Politicians love it because it looks like free money; critics note it's borrowing from tomorrow to pay for today, municipal style.

🏠 Real Estate

Beginner

assessment

The official determination of value or worth, whether it's property taxes, student performance, or your likelihood of success in a new role. Assessments are how institutions quantify the unquantifiable and then make important decisions based on those numbers. It's the bureaucratic art of turning subjective judgment into objective-looking reports.

🏠 Real Estate

Advanced

Double Close (or Double Escrow)

A transaction where you simultaneously buy and sell properties, often used in wholesaling to hide profit margins from the actual buyer.

🏠 Real Estate

Intermediate

punch list

A final list of minor repairs or incomplete items that need addressing before closing on new construction. It's proof that even 'move-in ready' is aspirational.

🏠 Real Estate

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