Real Estate & REITs

Q: REITs are required by law to distribute at least what percentage of taxable income?

90%. REITs must pay out 90%+ of taxable income as dividends — in exchange, they pay no corporate income tax.

Q: Which REIT type typically has the most stable income?

Net-lease REITs with long-term contracts. Net-lease REITs have tenants paying fixed rents under long (10–25 year) leases — very predictable cash flow.

Q: Cap rate in real estate is calculated as:

Net operating income ÷ property value. Capitalization rate = NOI ÷ Property Value. It's the unleveraged yield on a real estate investment.

REITs (Real Estate Investment Trusts) let you invest in real estate without owning property. They must distribute 90%+ of taxable income as dividends. REITs cover residential, commercial, industrial, and data centre properties.

Quick quiz and answers

What is a REIT?

Answer: A company that owns income-producing real estate, traded on exchanges. REITs let retail investors access large real estate portfolios with the liquidity of a stock.

REITs are required by law to distribute at least what percentage of taxable income?

Answer: 90%. REITs must pay out 90%+ of taxable income as dividends — in exchange, they pay no corporate income tax.

Which REIT type typically has the most stable income?

Answer: Net-lease REITs with long-term contracts. Net-lease REITs have tenants paying fixed rents under long (10–25 year) leases — very predictable cash flow.

Cap rate in real estate is calculated as:

Answer: Net operating income ÷ property value. Capitalization rate = NOI ÷ Property Value. It's the unleveraged yield on a real estate investment.

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