What is a mortgage Reit?

Author: | Published: 10 Nov 2009

Simon Crompton
Managing editor

A Reit is any vehicle that is designed for investors to pool capital to invest in real estate assets, provided that it meets certain tax requirements. They are usually publicly traded, which adds greater liquidity and allows investors to exit at any time. For US tax purposes they are a pass-through entity, meaning that there is no tax at the entity level. And the Reits pay dividends to the investors.

There are several different types of Reits – equity, mortgage and hybrid. Equity Reits directly invest in property and draw investment from the rents; mortgage Reits...