The History of Real Estate Investing
The history of real estate deal-making might begin at Genesis 13:5-9, where Abraham and Lot separated their pastures, thereby recognizing one another's property claims on each side of the line.
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Victory by Domination
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Generations of children, in the Western world especially, have grown up playing Monopoly, and understand real estate investment as a matter of putting together the right combination of properties, building lucrative hotels and crushing the opposition.
Real Estate Investment Trusts
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A REIT avoids the double taxation that faces a corporation and its shareholders. The U.S. Congress passed and President Eisenhower signed the Real Estate Investment Trust Act in 1960. (The acronym REIT is properly pronounced to rhyme with "street.")
Under this statute, a REIT receives favorable tax treatment on the condition that it distributes at least 95 percent of its income to its shareholders annually as dividends. That figure was later lowered to 90 percent.
The ensuing popularity of the REITs as investments effectively retailized real estate investment.
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East Asia
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The U.S. REIT has inspired imitation throughout the world. By the early 21st century, the institution was making headway in East Asia. The government of Hong Kong, for example, introduced a REIT code of its own in July 2003. A year and a half later, the Hong Kong stock exchange listed GZI REIT, a property trust consisting entirely of mainland Chinese buildings.
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- Photo Credit isolated dice image by Nikolay Okhitin from Fotolia.com A businessman calculating expenses at tax time image by Christopher Meder from Fotolia.com
