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What Are The Differences Between Delaware Statutory Trust (DST) And Real Estate Investment Trust (REIT) Investments?

Delaware Statutory Trust (DST) and Real Estate Investment Trust (REIT) are both investment structures that allow individuals to invest in real estate. However, there are some key differences between the two:

Delaware Statutory Trust (DST):

  • A DST is a type of trust established under Delaware law that holds title to a property and allows multiple investors to own a fractional interest in the property.
  • The trust is managed by a trustee, who is responsible for making decisions regarding the property and managing day-to-day operations.
  • DST investments offer investors the ability to invest in institutional-quality properties with a lower minimum investment amount.
  • DSTs are typically passive investments, meaning that investors have limited control over the property and decision-making.

Real Estate Investment Trust (REIT):

  • A REIT is a type of investment trust that pools funds from multiple investors to purchase and manage real estate properties.
  • REITs are required to distribute at least 90% of their taxable income to investors in the form of dividends.
  • REITs offer investors the ability to invest in a diversified portfolio of properties, reducing the risk associated with a single property investment.
  • REITs are publicly traded, allowing investors to buy and sell their shares on stock exchanges, providing liquidity.

In summary, the main differences between DSTs and REITs are the level of control and involvement the investor has in the property, the minimum investment required, the management structure, and the liquidity of the investment. Both types of investments can offer the benefits of real estate investment returns, but it is important to consider the specific differences and choose the investment structure that best aligns with your investment goals and risk tolerance.