​REAL ESTATE INVESTMENT TRUSTS (REITs)

Attractive marketplace
Real Estate Investment Trusts (REITs) are corporations or trusts that use the pooled capital of many investors to purchase and manage income property and/or mortgage loans. REITs are traded on ​NSE just like stocks; you can buy or sell REITs through your stockbroker​ as with other types of shares. 

Key feature
  • REITs offer tax advantages to investors and provide a liquid way to invest in real estate, which is an otherwise illiquid market. ​
  • Another benefit of REITs is that they allow investors to share in non-residential properties like hotels, malls, and industrial properties. 
  • REITs require no minimum investment and do not necessarily increase and decrease in value along with the broader market.
  • They pay yields in the form of dividends no matter how the shares perform. 
  • REITs can be valued based on fundamental measures – similarly to stocks – but different numbers tend to be important for the valuation of REITs.
There are three principal types of REITs: 
Equity REITs – purchase, hold and manage commercial and rental properties. Though they will finance these properties in many cases, their primary focus is on profits through acquisition and management.​ 
Mortgage REITs – do not purchase, own or manage properties. They invest in mortgages on real estate properties. Though these properties serve as collateral for the loans the mortgage REIT invests in, the REIT has no ownership position in the property itself.​
Hybrid REITs - combine the investment strategies of equity REITs and mortgage REITs by investing in both properties and mortgages.​​

See our FAQs on REITs for more information

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