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What are the benefits of investment in REIT?

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  • REIT is an investment tool that owns and operates rent-yielding real estate assets.
  • It allows individual investors to make an investment in real estate without owning it and earn an income.
  • REIT's are listed at the stock exchange. They can be traded like stock and NCD's.
  • REIT is an alternative investment option for long-term in real estate.
  • Income earned by REIT could be through rentals or capital gains or both, and it gets distributed to unitholders.
  • SEBI rules state that REITs shall distribute not less than 90 percent of the net distributable cash flows to its investors at least on a half-yearly basis.
  • REIT's offer regular and higher distributions compared to dividend on listed equity,
  • They offer higher liquidity and transparency than direct investment in real estate
  • They offer exposure to well-diversified real estate portfolio thus providing better risk mitigation.
  • REITs provide real estate ownership at an affordable ticket size. You could invest as low as Rs 2 Lacs.
  • REITs are professionally managed assets. REIT Managers are required to have at least 5 years of experience in property management.
  • REITs provide stable income and certain yield as 80% of REIT assets are income generating properties that have long term rental contracts.
  • REIT's are better insulated from regulatory/ political risks
  • REIT's are more accessible to small investors and likely to have higher liquidity.

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