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How To Invest in REITs in 5 StepsUnderstand what an REIT is and how it works.Be aware of the risks associated with REIT investments.Review the pros and cons of REITs to confirm they meet your investment objectives.Open an account at a reputable brokerage if you don't already have one.More items...?
What Qualifies as a REIT?Invest at least 75% of total assets in real estate, cash, or U.S. Treasuries.Derive at least 75% of gross income from rents, interest on mortgages that finance real property, or real estate sales.Pay a minimum of 90% of taxable income in the form of shareholder dividends each year.More items...
A REIT cannot own, directly or indirectly, more than 10% of the voting securities of any corporation other than another REIT, a taxable REIT subsidiary (TRS) or a qualified REIT subsidiary (QRS).
To qualify as a REIT, a trust needs to be a publicly traded unit trust that is resident in Canada and must meet tests set out in the Income Tax Act (Canada) (the ITA) based on, among other factors, the nature and quantity of real estate assets owned and the sources of trust revenue.
To qualify as an REIT on the JSE in South Africa, the REIT must own at least R300m in property, debt must be below 60% of its gross asset value, at least 75% of the income must come from real estate activities, and a minimum of 75% of the income they receive must pass through to investors (90% in the US).