InvestorQ : What is the objective of real estate investment trusts (REITs)?
Priyanka Singh made post

What is the objective of real estate investment trusts (REITs)?

Samita Patil answered.
2 years ago

REITs or real estate investment trust is an investment avenue with sole focus on real estate. With the nation developing at the fast pace that it is, realty across the country has done well. Scarcity of land and migration for employment opportunities have led to realty prices skyrocketing across cities.

While a lot of investors purchase land properties, a lot of them can’t due to financial constraints. For such individuals’ REITs are a good investment option.

The objective of REITs is to provide investors with dividends generated from capital gains accruing from the sale of commercial assets the REIT invests in. The trust distributes 90% of the income among its investors via dividends, thereby passing on its tax burden to shareholders.

Investment in REIT provides diversified and safe investment opportunities with relatively lower risks and an expert management team to ensure the investors earn lucrative returns on their investments.

Furthermore, it also gives investors the chance to have some share of investment in realty, which if one goes to invest in himself/herself, would be a very costly affair. Thus, investing in REITs helps one diversify his/her holdings and provide for long-term capital appreciation.