(EMAILWIRE.COM, October 05, 2010 ) Detroit, MI – Robert Shumake, local business owner and philanthropist, recently spoke at a local real estate investors’ networking group. The group was excited as they looked forward to learning how savvy investors are cashing in on real estate investments without the headache that comes with purchasing and managing property.

REITs were established by the U.S. Congress in the 1960s to allow individuals and families to be involved in large-scale investment opportunities. “Access to these investment opportunities was limited to wealthy individuals and institutions before Congress became involved,” said Shumake.

The first question asked was “What are REITs?” “Real Estate Investment Trusts (REITs) are corporations that primarily own and usually operate real estate that generates revenue including hotels, commercial office buildings, rental homes, apartment complexes, etc…REITs may also finance real estate and many have their shares traded on major stock exchanges,” said Shumake.

Robert Shumake explained the requirements a corporation must comply with in order to be considered a REIT. “According to the provisions of the Internal Revenue Tax Code, a REIT is required to pay, annually, at least 90 percent of its taxable income in the form of shareholder dividends. A REIT must be managed by a board of directors or trustees and have a minimum of 100 shareholders. They must invest at least 75 percent of the REIT’s total assets in real estate assets and their shares must be fully transferable. A REIT must have no more than 50 percent of its shares held by five or fewer individuals during the last half of the taxable year and they must derive at least 75 percent of gross income from rents, real property or interest on mortgages financing real property. A REIT can have no more than 20 percent of its assets consist of stocks in taxable REIT subsidiaries and one must be an entity that is taxable as a corporation.”

Robert went on to explain the different types of REITs available today. “Right now, there are many publicly traded REITs in the US. Shares of REITs are being traded on major stock exchanges daily, which make them different from traditional real estate. REITs are classified into three categories; Equity REITs, Mortgage REITs and Hybrid REITs. Equity REITs own and operate revenue generating real estate; Mortgage REITs lend money to real estate owners or extend their credit by purchasing loans or mortgage-backed securities; Hybrid REITs own properties as well as make loans to real estate developers and property managers,” he said.

The group was very impressed with Robert Shumake’s extensive knowledge of REITs. The final question asked was, “are REITs a smart investment today?” Shumake answered, “REITs are considered to be a good investment for diversifying your portfolio and reducing financial risk. REITs dividends come from the rent paid by those who occupy the REITs properties, which is considered to be a fairly stable revenue stream. Because rental rates tend to increase during periods of inflation, REIT dividends are usually protected from the negative effect of rising prices.”

Robert Shumake has developed a website dedicated to educating today’s real estate investor and anyone who desires to invest in real estate without the pressures of owning and managing property. The site contains a wealth of inspirational and educational articles about REITs. Visit the site often to read Robert Shumake’s latest articles about REITs investing at http://www.robertshumake.ws/


Contact:

William Smith
Inheritance Capital Group, LLC
25900 W. 11 Mile Road; Ste 260
Southfield, MI 48034
Phone: 249-443-0939
Email: wsmith@icgreit.com

This press release was submitted by Right Now Marketing Group, LLC

Contact Information:
Inheritance Capital Group, Inc
Robert Shumake
Tel: 249-443-0939
Email us


This is a press release. Press release distribution and press release services by EmailWire.Com: http://www.emailwire.com/us-press-release-distribution.php.