A real estate investment trust (“REIT”) is a company that owns, operates, or finances income-producing real estate. REITs provide an investment opportunity, like a mutual fund, that makes it possible for everyday people—not just banks, and hedge funds—to benefit from valuable real estate, present the opportunity to access dividend-based income and total returns, and help communities grow, thrive, and revitalize. REITs allow anyone to invest in portfolios of real estate assets the same way they invest in other industries – through purchasing individual company stock or through a mutual fund or exchange traded fund (ETF). The stockholders of a REIT earn a share of the income produced – without actually having to go out and buy, manage or finance property.
Imagine buying a flat in any city at 2 Crore and getting a rent of Rs 50,000, Which gives you a yield of 3% per year on rent,3% yield is not excellent, and also not everyone has two crores, This is were REITs come into play (Real estate investment trusts). Imagine a developer has decided to build a new mall, he requires a capital of 100 crores. Imagine 10000 investors coming together and investing 1 lakh each for the mall, These shops in the mall will be given on lease to huge brands. And will earn rental income for all 10,000 investors.
As an investor in a REIT you make money in two ways:
This how REIT’s work,why wait diversify your portfolio with REIT’s
At present there are three listed REIT’s in India,you can simply invest using your DEMAT account with as low as 10000-15000
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