REIT vs Physical Real Estate Investment: Which Is Better?
NDTV
The most important benefit of REIT is that it allows retail investors to put their money in commercial properties.
A Real Estate Investment Trust (REIT) is an entity that owns, operates or finances a pool of real estate assets that are held like a mutual fund. Much like a mutual fund collects money from investors and invests it in the stock market, a REIT too sources money from retail and institutional investors and channels these funds to help create more real estate assets. A REIT is currently allowed to invest only in commercial properties in India. With the government focusing on creating physical infrastructure like highways, bridges and buildings, experts say it is a good time to invest in REITs. How is REIT formed? There are some conditions that a company needs to fulfil to qualify as a REIT. Some of them are: It must have an asset base of at least Rs 500 crore and has to invest 80% of the money sourced from investors in revenue-generating properties. The company must distribute 90% of its income to investors as dividends. It can make 10% of the total investment in under-construction real estate. Why REITs?More Related News