[October 2023]
1 minute speech_Week 2 in October
Title : What is a REIT? Real Estate Investment Trusts Explained (2021)
Link : https://youtu.be/X0xDgGMnlAs?si=H4_HrybUXuxPIN2m
Time : 00:00~03:17
1. Summary
Hello everyone, Have you ever walked by a big mall or apartment building and thought about owning a piece of it? That's where REITs come in. REITs, short for Real Estate Investment Trusts, are like special savings accounts. But instead of just saving money, you're investing in properties. It's a way for regular people, not just the super-rich, to get a piece of the property pie. When these properties make money, you get a share. Many of us might already have some money in REITs, especially in retirement plans. These investments help in building new places, creating jobs, and improving our communities. So, REITs offer a simple way for all of us to be part of the property world. Interesting, right?
2. Script
Introduction to REITs:
REITs or Real Estate Investment Trusts were created to give everyday Americans the opportunity to own income-producing real estate. An opportunity that had been available only to wealthy investors and banks. REITs allow anyone to invest in real estate by buying their stock either directly or through a mutual fund or ETF. In the same way shareholders benefit by owning stocks in corporations, the stockholders of a REIT earn a share of the income produced through real estate investment.
American Involvement in REITs:
In fact, nearly 145 million Americans live in households that are invested in REITs. Many hold REITs in their retirement savings through 401ks or IRAs.
Classification and Types of REITs:
The REIT industry has a broad profile. But REITs often are classified in one of two basic categories: equity REITs and mortgage REITs called MREITs. Equity REITs own a wide range of property types from offices and apartments to 21st-century real estate that powers the digital economy like data centers and cell towers. Equity REITs derive most of their revenue from rent on those properties. MREITs get most of their revenue from interest earned on their investments in mortgages and mortgage-backed securities used to finance residential or commercial properties.
Impact of REITs on the Economy:
Their investments have helped finance 1.7 million American homes. REITs use the money that has been invested in them to grow their operations and in the process, revitalizing communities and creating jobs. REITs invested 85.2 billion dollars in new construction and capital expenditures in 2020. And they contributed 2.9 million full-time jobs to the economy, generating 197 billion dollars in labor income.
Benefits and Returns from REITs:
REITs have proven to be a highly effective way to raise capital to improve neighborhoods, power essential community services, and build the infrastructure of tomorrow. REITs also are a total return investment, combining high dividends with the long-term capital appreciation characteristic of real estate. The current 20-year compound annual total return for listed equity REITs is nearly 11%. REITs are required to distribute at least 90 percent of their taxable income annually to shareholders as dividends, and most distribute 100 percent. REITs distributed 89 billion of dividend income to their investors in 2020.
Evolution and Mission of REITs:
Over time, REITs have evolved to meet the changing needs of the American economy. But they have remained true to their original mission: to make the benefits of income-producing real estate investment accessible to everyday Americans.