You can refer to the definition of Wikipedia, which is rather good.
To simplify:
The SCPI is a corporation that owns real estate (offices, shops, houses etc ...)
It hires the property to renters, and therefore gets income from hires.
The capital is divided into shares.
Holders of shares are somewhat co-owners. Property paper term is employed wrongly, as the REIT owns physical real estate
The management of the housing stock is trusted to a company , whose compensation is fixed, which is great for the financier
Unitholders receive a hire in proportion to their number of shares, usually each quarter, net of fees (management fees, insurance charges and so on.)
The rent is subject to tax on property income, as a classical property
Benefits (offices, shops)
1. SECURITY
The REIT holds physical property assets, and typically has no debt or very little ( It's real, solid, it has got value)
2. AVAILABILITY
You can sell your stock at any point, although it can take a few weeks delay to face sellers and new buyers
3. PROFITABILITY
History gives good points for the SCPI, by counting the distributed performance + increase of the share we get a mean annual returns of 9% for the good REITs.
Office REITs currently provide a yield of 5 to 5.30%, and for retail REITS it is going from 5.40 to 5.60% net which is awesome
4. FINANCING
You should purchase stocks in cash, or finance them through a mortgage. The rental income can pay for the majority of the regular charge
5. Management fee
They're often in the statute, and thus cannot be modified without approval of a significant percentage of unitholders. Unlike listed corporations, or SIIC, management costs are set and controlled.
DISADVANTAGE:
1. Property tax earnings.
But if you use the loan, the interest is deductible
2. Price/Resale
There is included in the purchase price between 6 and 10% service charge
So if you buy and resell immediately, you lose 6 to 10%
That's the reason why the purchase of SCPI is endorsed for the medium term, till the value of the share increases and offsets the price of service charge
Ultimately there are also fiscal SCPI Scellier, such as null that permit tax benefits by spreading the risk over a diverse portfolio rather than a single asset.
To simplify:
The SCPI is a corporation that owns real estate (offices, shops, houses etc ...)
It hires the property to renters, and therefore gets income from hires.
The capital is divided into shares.
Holders of shares are somewhat co-owners. Property paper term is employed wrongly, as the REIT owns physical real estate
The management of the housing stock is trusted to a company , whose compensation is fixed, which is great for the financier
Unitholders receive a hire in proportion to their number of shares, usually each quarter, net of fees (management fees, insurance charges and so on.)
The rent is subject to tax on property income, as a classical property
Benefits (offices, shops)
1. SECURITY
The REIT holds physical property assets, and typically has no debt or very little ( It's real, solid, it has got value)
2. AVAILABILITY
You can sell your stock at any point, although it can take a few weeks delay to face sellers and new buyers
3. PROFITABILITY
History gives good points for the SCPI, by counting the distributed performance + increase of the share we get a mean annual returns of 9% for the good REITs.
Office REITs currently provide a yield of 5 to 5.30%, and for retail REITS it is going from 5.40 to 5.60% net which is awesome
4. FINANCING
You should purchase stocks in cash, or finance them through a mortgage. The rental income can pay for the majority of the regular charge
5. Management fee
They're often in the statute, and thus cannot be modified without approval of a significant percentage of unitholders. Unlike listed corporations, or SIIC, management costs are set and controlled.
DISADVANTAGE:
1. Property tax earnings.
But if you use the loan, the interest is deductible
2. Price/Resale
There is included in the purchase price between 6 and 10% service charge
So if you buy and resell immediately, you lose 6 to 10%
That's the reason why the purchase of SCPI is endorsed for the medium term, till the value of the share increases and offsets the price of service charge
Ultimately there are also fiscal SCPI Scellier, such as null that permit tax benefits by spreading the risk over a diverse portfolio rather than a single asset.
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