3 Important Differences Between A REIT and A Business Trust That Investors Have To Know (2024)

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Audio("https://s.yimg.com/pv/static/misc/voice-error-202105050733.wav"),r.closeAudio=new Audio("https://s.yimg.com/pv/static/misc/voice-close-202105050733.wav"),r.permissionGuide=n.querySelector("#spchp"),r.permissionGuideClose=n.querySelector("#spchpx"),r.permissionGuideTimer=null,r.onEscKeyDown=function(e){"Escape"===e.code&&(r.recognition.stop(),r.sendBeacon("keybrd","voicesearch_cancel_esc"),r.closePanel(r))},r.isBrowserSupported()){var a=e.SpeechRecognition||e.webkitSpeechRecognition,s=e.SpeechGrammarList||e.webkitSpeechGrammarList;r.recognition=new a;var c=new s;c.addFromString&&c.addFromString("#JSGF 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Event("VOICE_JS_READY"))}}o.I18n=m,o.prototype.renderPermissionGuide=function(e){var n='\n

    \n

    \n

    \n

    \n

    \n

    \n

    \n

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    \n

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    \n

    \n

    \n

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    \n

    \n

    \n

    \n

    \n

    \n \n \n \n \n \n \n

    \n

    \n

    \n \n \n '.concat(e.i18n.t("search.voice.recognition_retry"),'\n

    \n

    \n

    \n

    \n

    \n

    \n ').concat(e.i18n.t("search.voice.trending_title"),'\n \n

    \n

    \n

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e)&&("SpeechGrammarList"in e||"webkitSpeechGrammarList"in e)}}],d=0;d0){var n=e.speechResult.charAt(e.speechResult.length-1);"."!==n&&"?"!==n&&"。"!==n&&"?"!==n||(e.speechResult=e.speechResult.slice(0,-1))}},o.prototype.sendBeacon=function(n,t){var o=e.YAHOO.ULT||{},i=e.YAHOO.SB||{};if(o.beacon_click){var r={_S:i.config.i13n.spaceid,_I:i.config.i13n.pvid,actn:n,sec:"search",slk:t};e.YAHOO.ULT.beacon_click(r)}},o.prototype.ajaxReq=function(t,o){var i,r,a=XMLHttpRequest.DONE||4,s=new XMLHttpRequest;if(n.documentMode&&n.documentMode<10)return(new e.XDomainRequest).onload=function(){try{r=JSON.parse(i),o(r)}catch(e){return}},s.open("GET",t),void s.send();s.onreadystatechange=function(){if(s.readyState===a)if(200===s.status){i=s.responseText;try{r=JSON.parse(i),o(r)}catch(e){return}}else o(r)},s.open("GET",t,!0),s.timeout=1e4,s.send()},e.YAHOO||(e.YAHOO={}),e.YAHOO.Util||(e.YAHOO.Util={}),e.YAHOO.Util.VoiceSearch=o}(window,document)}();var 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t,o,i,r=e.getConfig();if(n.ybar&&"desktop"===r.device&&(null===(t=r.bucketConfig)||void 0===t?void 0:t.highlight_searchassist)&&(null===(o=r.bucketConfig)||void 0===o?void 0:o.overlay_class)){n.ybar.setAttribute("data-ovrly-bkt",r.bucketConfig.overlay_class),null===(i=n.searchForm)||void 0===i||i.classList.add(Un[r.bucketConfig.overlay_class]);var a=document.createElement("div");a.classList.add(Un.overlay,Un[r.bucketConfig.overlay_class]),document.body.appendChild(a),e.onDestroy((function(){document.body.removeChild(a)})),e.addElementListener(n.searchForm,"focusout",(function(e){if(n.searchForm&&n.searchInput){var t=e.relatedTarget;t&&!n.searchForm.contains(t)&&window.YAHOO.SA&&window.YAHOO.SA.apps&&window.YAHOO.SA.apps[0]&&window.YAHOO.SA.apps[0].view.shown&&window.YAHOO.SA.apps[0].view.hide()}}))}}(e,n),zn(e,n),n.voiceSearchBtn&&function(e,n){var t=e.getConfig(),o=t.locale,i=function(){var e,t;(null===(t=null===(e=window.YAHOO)||void 0===e?void 0:e.Util)||void 0===t?void 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    3 Important Differences Between A REIT and A Business Trust That Investors Have To Know (2024)

    FAQs

    What is the difference between a REIT and a business trust? ›

    The trustee of a business trust is considered the trustee-manager and is the same entity that owns and manages the assets on behalf of the unitholders of the business trust. Meanwhile, a REIT requires a trustee to hold the assets and a separate manager to manage the properties for unitholders.

    What is the difference between a trustee and a REIT? ›

    The trustee is responsible for holding the assets of the REIT on behalf of unit holders. Other duties may include ensuring compliance with all applicable laws and protecting certain rights of unit holders. The trustee is paid a fee for providing this service.

    What is the difference between a REIT and a corporation? ›

    A REIT is an entity that would be taxed as a corporation were it not for its special REIT status. To meet the definition of a REIT, the bulk of its assets and income must come from real estate. In addition, it must pay 90% of its taxable income to shareholders.

    How do you tell if a company is a REIT? ›

    You can verify the registration of both publicly traded and non-traded REITs through the SEC's EDGAR system. You can also use EDGAR to review a REIT's annual and quarterly reports as well as any offering prospectus.

    Why do investors like REITs? ›

    REITs tend to offer a good yield over and above high-quality bonds and most equities, so they are of particular interest to income seekers, though the combination of income and rental growth can be attractive to all investors.

    What is the difference between a business trust and a company? ›

    A trust is an obligation imposed on a trustee to hold business assets or other property to benefit beneficiaries. At the same time, a company is a separate legal entity that can own assets, incur debts and enter contracts. A formal trust deed governs trusts, while companies are regulated by the Corporations Act 2001.

    What is the difference between a trustee and an estate? ›

    A trust can be created while the grantor is alive, while an estate is created at the moment of someone's death. A trust is intended to be a semi-permanent entity. It exists to distribute assets over time according to a series of rules and conditions, overseen by a trustee. An estate is intended to be temporary.

    What is the difference between a partnership and a REIT? ›

    For starters, REITs are corporations with regular management structures and shareholders, whereas MLPs are partnerships with so-called unitholders (i.e., limited partners). Investing in a REIT gives you an ownership share in a corporation, whereas MLP investors possess units in a partnership.

    What is the difference between a REIT and a real estate investment company? ›

    Whereas REITs pay dividends to investors, real estate funds aim to generate value through the appreciation of the securities they own. REITs are fundamentally a current-income strategy, as they are required to pay out at least 90% of taxable income each year as dividends to shareholders.

    What are the pros and cons of the REIT structure vs. C Corps and Partnerships? ›

    This compares favorably to C-corps, which have a double taxation problem (profits are taxed at both the corporate and the shareholder level) The REIT structure is also favorable to partnerships, which do not pay taxes at the corporate level, but instead pass through all tax liabilities directly to the owners, who will ...

    What is the difference between a REIT and a non REIT? ›

    Why are REITs considered more liquid than direct real estate investments? REITs are traded on stock exchanges, making them more liquid and easier to buy and sell compared to direct real estate investments, which are typically less liquid and involve higher transaction costs.

    What is the 90% rule for REITs? ›

    To qualify as a REIT, a company must have the bulk of its assets and income connected to real estate investment and must distribute at least 90 percent of its taxable income to shareholders annually in the form of dividends.

    What is the 5 50 rule for REITs? ›

    Beginning with its second taxable year, a REIT must meet two ownership tests: it must have at least 100 shareholders (the 100 Shareholder Test) and five or fewer individuals cannot own more than 50% of the value of the REIT's stock during the last half of its taxable year (the 5/50 Test).

    Is a REIT a form of a trust? ›

    A Real Estate Investment Trust (REIT) is a security that trades like a stock on the major exchanges and owns—and in most cases operates—income-producing real estate or related assets. Many REITs are registered with the SEC and are publicly traded on a stock exchange.

    Can a REIT be a trust? ›

    General requirements. To qualify as a REIT, an organization must be a corporation, trust or association. A REIT cannot be a financial institution or an insurance company and it must be managed by one or more trustees or directors.

    Is a business trust a good idea? ›

    The business trust will work similarly to an LLC, in that the business is not owned by you personally. The trust is the one who owns it more and the trust can even own an LLC and this gives you an additional layer of protection from liability. Another advantage for you is that it gives you greater privacy protection.

    Why REIT is better than owning property? ›

    Perhaps the biggest advantage of buying REIT shares rather than rental properties is simplicity. REIT investing allows for sharing in value appreciation and rental income without being involved in the hassle of actually buying, managing and selling property. Diversification is another benefit.

    Can an LLC become a REIT? ›

    The acronym R.E.I.T stands for “Real Estate Investment Trust,” however, a REIT does not necessarily need to be formed as a trust. In fact, many REITs are formed as corporations and nothing precludes a REIT from being formed as a partnership or LLC.

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