The ins and outs of real estate investment trusts (REITs)

Julie Brownlee, Fsp Invest, 16 Sep. 2014

Tags: reits, reit, real estate investment trust, investing in property, what are reits, reits dividends



If you want to invest in property, a real estate investment trust (REIT) can be a great way to do just that.

You can benefit from the property market without the hassle of owning and managing properties.

And with REITs distributing the majority of their rental income back to shareholders in the form of dividends, they can boost your income too.

So what exactly are REITs? When did REITs establish in South Africa? And why do companies becomes REITs?

Read on to find out…



What are REITs?


REITs are property companies that have a listing on a stock exchange, like the Johannesburg Stock Exchange.

They invest in rental properties.

These can be commercial properties, such as retail space, offices and warehouses. Or they can be residential properties, such as townhouses and apartments.


The history of REITs in South Africa


REITs were established in South Africa at the end of 2012. They offer you a way to invest in property assets without having to buy them directly.

Since the introduction of the REIT status, many property companies have converted to them. This includes some of South Africa’s largest landlords.


Why do property companies becomes REITs?


The main reason that property companies convert to REITs is because of the tax benefits. They don’t have to pay corporation tax on the rental profits and capital gains from their rental properties.

In exchange for this tax arrangement, the companies must pay 75% of their rental profits out to shareholders in dividends every year.

There are over 35 REITs now listed on the JSE. Due to the tax arrangement of these companies, they tend to pay good dividend yields.

So there you have it, the ins and outs of REITs.

*********** Recommended Product ************

Collect payouts of R800, R1,600, R2,400 or more...

For once, government spending can end up in your hands!


It sounds incredible right! The government just paying out money that actually finds its way to citizens like this.

Click here to get your name on the list, and start receiving 'Special Payout' cheques of R800, R1,600, R2,400 or more...

*******************************************


Related QA

Pic
Washington asked:
Good day good people If you bought Master property in 90 days please email me washingtonmuavha@yahoo.com or get hold of me 0790559477 your help will [read more]
Published at 24 Feb. 2017 in: Property Online 1 Answer
Pic
thomaswreid asked:
Should we keep our property investments at this stage after Brexit? I am specifically thinking of NEPI, Redefine International and Coreshares [read more]
Published at 29 Jun. 2016 in: Property International properties 1 Answer
Pic
Washington asked:
Good day On your book lots of topics are written which i like. i just want to know before i purchase if it also cover taxation too? [read more]
Published at 23 Jun. 2016 in: Property 1 Answer
Pic
kierondavis asked:
I would like to invest in property, however with the new land expropriation bill being drafted and soon to be adopted, is it not a bad investment [read more]
Published at 04 Feb. 2016 in: Property 1 Answer
Pic
steve asked:
Hi Francois, I have loaded the disc and the PROPERTY PROFIT CALCULATOR DOES NOT PULL THE INFO FROM THE INPUT SHEET TO THE RESULTS SHEET. I DID [read more]
Published at 11 Jan. 2016 in: Property 1 Answer

Related articles:


Latest:

Comments
0 comments



 
 


Youtube Twitter Facebook

Connect with us:    

POPULAR TOPICS
  • Accelerated Investor
  • Accessories
  • Accountancy
  • Accountancy services
  • Accounting