question archive 1) Explain what are Real Estate Investment Trusts and the various types
Subject:FinancePrice:3.86 Bought7
1) Explain what are Real Estate Investment Trusts and the various types.
2. Explain the common types of real estate investment securities that are traded in the secondary market in Kenya and those traded in the USA.
Real estate investment trust or REIT is a company that owns and manages income-generating real properties (Chen, 2020). REITs have a steady income flow, is modeled after mutual funds and are likewise publicly traded like stocks. REITs are invested in properties such as real estate, apartment buildings, hotels, medical facilities and warehouses. There are three types of REIT.
Step-by-step explanation
1. Explain what are Real Estate Investment Trusts and the various types.
Real estate investment trust or REIT is a company that owns and manages income-generating real properties (Chen, 2020). REITs have a steady income flow, is modeled after mutual funds and are likewise publicly traded like stocks. REITs are invested in properties such as real estate, apartment buildings, hotels, medical facilities and warehouses. there are three types of REIT:
REIT is considered a security that can be traded like stocks. It is very liquid which allows investors to have regular dividend payments.
2. Explain the common types of real estate investment securities that are traded in the secondary market in Kenya and those traded in the USA.
Common types of REIT in Kenya:
There are two types of REITs in Kenya: D-REITs (Development Real Estate Investment Trust Scheme) and I-REITs (Income Real Estate Investment Trust Scheme) (Munene, 2015). D-REITs are focused on construction and development of real estate while I-REITs are focused on income-generating properties and distribute 80% of its income as dividends to its investors. D-REITS are only offered to professional investors while I-REITs are offered to both professional and retail investors.
Common types of REIT in USA: