One of the major attractions of real estate investment trusts is that they pass-through income that sidesteps corporate double taxation. In order to qualify for tax benefits, REITs must comply with a set of asset and income tests. A taxable REIT subsidiary (TRS) is a corporation that gives REITs some compliance wiggle room, enabling REITs to compete with other real estate … [Read more...] about Taxable REIT Subsidiaries
Articles
Beta Explanation
Real estate is often called an “alternative” investment. That means it is an alternative to investments in stocks and bonds. Why is it good to have an alternative investment? The answer has to do with risk, reward, and a statistic called beta (β). In this article, we will define beta and explore why it is important to your investment strategy. We will also see how to … [Read more...] about Beta Explanation
REITs vs Real Estate Options
This is the seventh in our series of articles of ways to invest in real estate. Real estate options come in two flavors: Over-the-counter (OTC) options to buy property and exchange-traded options on REITs and REIT exchange-traded funds. OTC Options OTC options are private contracts between a buyer and seller. They are quite different from exchange-traded futures. They … [Read more...] about REITs vs Real Estate Options
REITs vs Real Estate Swaps
This is the eighth and last in our series of articles of ways to invest in real estate. Swap contracts come in a variety of types, including the total return swap, equity swap, contract for difference and credit default swap, among others. In this article, we’ll address the use of total return swaps to replicate the return one would earn on a REIT index ETF (exchange-traded … [Read more...] about REITs vs Real Estate Swaps
REITs vs Real Estate Index Futures
This is the sixth in our series of articles of ways to invest in real estate. In the previous installment, we reviewed how real estate index funds match up against REITs. Real estate indexes form the basis for other types of financial instruments besides mutual funds and exchange-traded funds. In the next three articles, we’ll discuss how real estate indexes underlie three … [Read more...] about REITs vs Real Estate Index Futures