{"id":1288,"date":"2022-01-31T09:41:29","date_gmt":"2022-01-31T09:41:29","guid":{"rendered":"https:\/\/consortiumsecurities.com\/?p=1288"},"modified":"2022-04-23T07:53:48","modified_gmt":"2022-04-23T07:53:48","slug":"reit-basics","status":"publish","type":"post","link":"https:\/\/ankamisolutions.co.in\/consortium-test\/reit-basics\/","title":{"rendered":"REITs – A better way to invest in Real Estate"},"content":{"rendered":"

When we think of creating an alternate income stream, we tend to think of rental income from properties or interest income on Fixed Deposits\/Bonds, etc. Over the last few years with investor awareness increasing and a push by the Mutual Fund industry around\u00a0<\/span>Systematic Withdrawal Plans (SWPs), SWPs have gained\u00a0<\/span>popularity as an instrument for stable monthly income.\u00a0<\/span>Just like debt Mutual Funds are a tax efficient, diversified and liquid alternative to Fixed Deposits, the same way REITs are a tax efficient, diversified and low cost mechanism to own real estate assets from an investment perspective.<\/span>
\nWhat is a REIT?<\/span><\/b>\u00a0<\/span><\/p>\n

REITs, or Real Estate Investment Trusts, are similar to mutual funds. REITs pool money from investors who want to invest in real estate and invest it in a number of yielding properties\/assets that provide investors with consistent cashflows similar to rent. <\/span>\u00a0<\/span><\/p>\n

Just like when you own a stock you own a piece of the underlying business, in case of REITs you own a part of ALL the properties owned and managed by the REIT. The rental received by the REIT is passed through to the REIT unit owners and any appreciation\/deprecation in the underlying property reflects in the NAV and unit price over time.\u00a0<\/span>When investing in a REIT, you need to understand the underlying cash flows from the various projects\/SPVs owned by the REIT, governance structure, alignment of interest, distribution, etc.<\/span>\u00a0<\/span><\/p>\n

Why REITs?<\/span><\/b>\u00a0<\/span><\/p>\n