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 Ohio, as in other states, Real Estate Investment Trusts (REITs) are governed by federal tax law, specifically by the Internal Revenue Code (IRC). REITs must comply with certain IRS requirements to qualify as a REIT, such as investing at least 75% of total assets in real estate and deriving at least 75% of gross income from rents or mortgage interest. Ohio does not have specific statutes that separately govern the formation and operation of REITs; they are formed under general corporate or trust laws. REITs offer Ohio investors the opportunity to own a share of income-producing real estate, which can provide dividend-based income and potential for capital appreciation. The benefits of investing in a REIT include liquidity, diversification, and for qualified REITs, preferential tax treatment, such as not being subject to corporate income tax at the entity level. However, investors are still subject to individual income tax on the dividends received and any capital gains from the sale of REIT shares.