Quick overview: Benefits of Investing in Real Estate Investment Trusts
Are you worried about taking out a mortgage to purchase a house? Here’s an option for you: The Real Estate Investment Trust.
Let’s find out what makes Real Estate Investment Trusts the ideal investment vehicle for you.
Liquidity
Liquidity is the primary reason that anyone would want to invest in REITs. Asset classes such as real estate are known to have a favourable risk-return profile. The returns you can get from these investments are great, and the downside risk is shallow. Yet real estate is highly illiquid, which is a significant drawback for you. That is where RIET investment comes in for you!
A REIT investment is most valuable when it comes to liquidity. Due to their stock exchange listing, most REITs are easy to purchase and sell, which increases their liquidity.
RIET helps you diversify your risk
Small ticket real estate investors can diversify their portfolios with REITs. An investment in real estate requires an extensive financial commitment on the part of the buyer. As an investor, you have a minimal number of options. Thus you are exposed to the risks and returns of those micro-markets. Because of this, real estate may seem like a high-risk investment.
However, Thanks to REIT, you have the opportunity to diversify this risk since these trusts own a wide variety of assets such as apartment buildings, condos, office buildings, retail shops, etc.
REIT offer a large number of choice
Investing in REITs offers a large number of choices for you. There are several different types of trusts that are catering your diverse needs. Several Real Estate Investment Trusts (REITs) aim to invest exclusively in equity. By doing so, they gain cash flow and capital appreciation from the properties they buy outright.
Additionally, REITs provide you with a debt-based investment option. Thus by combining debt and equity-based REITs, you can construct a portfolio in terms of risk-reward!
Dealings are transparent
Due to their SEBI regulation, REITs need to submit annual financial reports audited by professionals. Therefore, you can know information on taxation, ownership, and zoning, thus ensuring that everything is transparent.
Predictability
Compared to other investments, Real Estate Investment Trusts offer you a high level of predictability. In REITs, real estate is the underlying investment. It is predictable how much real estate will appreciate and how much it will increase in rental value. A fund of this type can therefore predict with high degrees of accuracy and certainty.
Based on past performance records, real estate investment trusts (REITs) have consistently outperformed stock markets. Investing in REITs can boost your returns because they are less volatile than other investments.
To conclude
You can gain many benefits from REIT investment because it is a low-risk investment and offers a wide range of options.
Disclaimer: The views expressed above are for informational purposes only based on industry reports and related news stories. PropertyPistol does not guarantee the accuracy, completeness, or reliability of the information and shall not be held responsible for any action taken based on the published information.
