Question

Advantages of investing in REITs are that

A) shares can be purchased directly from the company.
B) the shareholders decide which properties to buy and sell.
C) the managers take care of maintenance.
D) the income is nontaxable

Answer 1

REITs have advantages such as easy entry into the market, professional management of properties, and potentially lower taxes on distributions to shareholders.

Step-by-step explanation:

REITs, or real estate investment trusts, have several advantages for investors. Firstly, shares can be purchased directly from the company, allowing investors to easily enter the market. Secondly, the shareholders of REITs do not get to decide which properties to buy and sell. Instead, the properties are managed by professionals, which frees up the investors from the responsibility of maintenance and management.

Finally, while the income from REITs is taxable, the distributions made to shareholders can qualify for a special tax treatment, resulting in potentially lower taxes.