REI (Real Estate Investment Trust)

Definition

A publicly-traded company owning income-producing real estate, basically real estate democratized for stock market players.

Example Usage

We added a real estate ETF tracking multiple REITs to our portfolio.

Origin

Investment vehicle created by Congress in 1960

Fun Fact

REITs are required by law to distribute at least 90% of taxable income to shareholders.

Source: Real Estate and Securities Terminology

Related Terms

Intermediate

encroachment

When a structure, improvement, or object from one property illegally extends onto a neighboring property. It's your neighbor's fence being three feet on your side, discovered precisely when you're trying to sell.

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Advanced

recourse loan

A loan where the borrower remains personally liable even after foreclosure if the property sells for less than owed. It's the lender's insurance policy that you can't just walk away.

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irem

Institute of Real Estate Management—professional organization for property managers that awards the CPM (Certified Property Manager) designation. The Ivy League of people who deal with broken toilets and angry tenants.

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Advanced

floor area ratio

The ratio of total building floor area to the size of the land parcel, expressed as a decimal that determines building bulk. A FAR of 2.0 means you can build twice the square footage of your lot, just stack it up.

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Intermediate

Contingency

A legal escape hatch that lets you bail on a home purchase if something goes sideways, which it absolutely will. Waiving contingencies is the real estate equivalent of skydiving without checking your parachute.

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Intermediate

Bidding War

An auction-style feeding frenzy where buyers throw increasingly insane amounts of money at a house until only one financially reckless person remains standing. The winner gets the house. Everyone else gets therapy.

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