Real estate Investment trust is like a mutual fund which invests in real estate directly, either through properties or mortgages. The returns you get on the property is primarily through rent if invested directly, else it would be in the form of interest on mortgages. There are also mixed type of REIT's which invest on properties directly as well as earns on mortgages.
REITs invest in shopping malls, office buildings, apartments, warehouses and hotels. Many of the REIT's invest specifically in one area of real estate - shopping malls, or in one specific region, state or country.
Advantages of REIT's over owning a real property are:-
REIT's are yet to be introduced in India even though its is very highly successful in countries like Singapore, USA.
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REITs invest in shopping malls, office buildings, apartments, warehouses and hotels. Many of the REIT's invest specifically in one area of real estate - shopping malls, or in one specific region, state or country.
Advantages of REIT's over owning a real property are:-
- Can invest any amount.
- More liquid than real property.
- Also diversifies the money in different properties. (Usually REIT's come with the condition that any one property should not be more than 15% of the total fund amount)
- Doesn't give the headache associated with properties ;-)
REIT's are yet to be introduced in India even though its is very highly successful in countries like Singapore, USA.
Related Posts:
Gold ETF
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