The amount of investors investing in REITs has increased by 21 percent as compared to April 2019, while the property sector has seen a lot of pressure due to COVID in this period.
What is the advantage of REITs (symbol)
Amit’s father Amirchand is getting engrossed in worry these days. He considered investing in real estate as the best. But COVID spoiled all their equations. It is becoming difficult to sell the flat in which he had bought two years ago, in such a situation, there is a possibility of sinking the amount invested two years ago, far from the matter of return. However, on the other hand, Amit went two steps ahead of his father. Following the advice of his financial advisor, he invested in REITs i.e. Real Estate Investment Trust, since April 2019 till now he has got a return of 21 percent. Which is much better than the falling property market. If you are also looking for an opportunity to invest in property, then you should also take a look at REITs, which gives full benefits of investing in the sector without buying property.
what is rits
REITs is a great way to invest in real estate without actually buying a property. Here you do not need lakhs of rupees to invest in property. Like SIP in any mutual fund, you can also buy REITs. There are two types of rits. The first REITs that are listed in the stock market. You can buy and sell them like stocks. As of now, there are three listed REITs in the country including Embassy Office Park, Brookefield India and Mindspace Business Park. You can also start investing in listed REITs with a very small amount. Another way to invest in REIT is through mutual funds. These are fund of funds which invest in global REITs through their funds. That is, they earn profits by investing your money in properties located abroad. There are currently three funds in this category in the country including Kotak International, Mahindra Manulife and the recently launched PGIM India Global Select Real Estate. Which are currently giving returns of 8 to 21 percent.
What is the advantage of REITs
With the advent of REITs, the way to invest in property has become easier. With this new option, there is a possibility of better returns and there is no hassle of finding a property, EMI or maintenance. The company that brings Reet does all these things. And you can get profits by investing in REITs. Kirtan Shah, co-founder of SRE Wealth, says that REIT gives an opportunity to include real estate in its portfolio at a low cost. You can include 5% of it in your portfolio. Those investing in listed REITs get more benefits in terms of tax and earnings. The interest and dividend paid on a quarterly basis in the listed REITs are tax free. On the other hand, Sebi registered investment adviser Jitendra Solanki is telling that not every retail investor will be able to bear the risk associated with the market. Hence it is better to invest in Global REIT Fund of Funds. In REIT listed you buy shares of one company rather in REIT fund you invest globally and invest in well performing companies.
Expecting further growth in REITs business
The market is returning brightly due to the control of the COVID epidemic. This glow is increasing rapidly in the realty sector. Real Estate Investment Trust ie REIT has a major contribution in this. People are increasingly interested in this new option of earning returns through rent in commercial properties. The report of ICICI Securities is telling that in the first half of the financial year 2021-22, 99 percent of the rent earned. In the second quarter, the leasing business grew by 140 percent to 135 lakh square feet. There are indications that the business of REIT may increase further in the coming days.
The amount of investors investing in REITs has increased by 21 percent as compared to April 2019, while the property sector has seen a lot of pressure due to COVID in this period. REITs is a great way to invest in real estate without actually buying a property.
SEBI is the regulator of REIT like stock market and mutual funds. Under its guidelines, it is mandatory to invest 80 percent of the REIT in a ready-to-move and rent-paying property. The listed REIT has to give 90% of its earnings to the investor. Investors will get this in the form of dividend and interest. All the existing REITs are investing in commercial properties only. Recently RBI has also allowed Foreign Portfolio Investors (FPIs) to invest in ReIt. Due to this, the business of Reet is expected to grow rapidly in the coming days.
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