Real estate investment trusts (“REITs”) allow individuals to invest in large-scale, income-producing real estate. A REIT is a company that owns and typically operates income-producing real estate or related assets. These may include office buildings, shopping malls, apartments, hotels, resorts, self-storage facilities, warehouses, and mortgages or loans.

Unlike other real estate companies, a REIT does not develop real estate properties to resell them. Instead, a REIT buys and develops properties primarily to operate them as part of its own investment portfolio.

In Georgia, as in other states, Real Estate Investment Trusts (REITs) are governed by both state statutes and federal law. REITs are designed to provide a way for individual investors to earn a share of the income produced through commercial real estate ownership without actually having to go out and buy, manage, or finance property. Georgia follows the general federal guidelines for REITs, which require them to distribute at least 90% of their taxable income to shareholders annually in the form of dividends. Additionally, REITs must have a minimum of 100 shareholders, be managed by a board of directors or trustees, and have at least 75% of their total investment assets in real estate. They must also derive at least 75% of their gross income from rents from real property, interest on mortgages financing real property, or from sales of real estate. The benefit for investors in Georgia is that REITs are not taxed at the corporate level if they adhere to these requirements, which can lead to higher income distributions for investors. It's important for investors to consult with an attorney or a tax advisor to understand the specific implications of investing in REITs, including the state-specific regulations that may apply.