Last Updated:June 18, 2025, 17:45 IST
REITs offer a simple way to invest in real estate without owning property.
They offer steady income and diversification for all investors. (Representative Image)
Real estate is often seen as one of the most reliable ways to build wealth, but buying property requires a large investment and comes with management hassles. That’s where Real Estate Investment Trusts, or REITs, offer a smart alternative.
REITs let investors put their money into real estate projects—such as commercial buildings, malls, or office spaces—without actually owning or managing any property.
This makes it easier for people to benefit from the real estate market with smaller investments and less effort, all while earning potential returns through dividends and capital appreciation.
What Are REITs?
Real Estate Investment Trusts, or REITs, are companies that invest in real estate that earns regular income. Instead of buying property yourself, you can buy shares in a REIT, just like buying stocks. This allows you to earn money through regular dividend payouts and possible increases in the value of your shares.
Types of REITs
Equity REITs: These REITs own and manage real estate like apartments, office buildings, malls, and hotels. They make money mainly through rent.
Mortgage REITs (mREITs): These don’t own properties but invest in home loans and mortgage-backed securities. They earn income from the interest on these loans.
Hybrid REITs: These combine both approaches—owning real estate and investing in mortgages—offering a mix of rental income and interest earnings.
How to Invest in REITs
– Pick the Right Type
Choose between equity REITs (own properties), mortgage REITs (invest in loans), or hybrid REITs (a mix of both), depending on your financial goals.
– Choose How You Want to Invest
You can buy:
Publicly Traded REITs – Like regular stocks, available on the stock exchange.
REIT Mutual Funds or ETFs – These invest in a mix of REITs to reduce risk.
– Check Key Performance Factors
Before investing, look at:
Dividend yield (how much income you’ll earn)
Payout ratio and FFO (Funds from Operations, a sign of REIT’s profitability)
Property variety and location in their portfolio
– Open a Brokerage Account
To buy REITs, you’ll need a trading account with a broker that offers low fees and research tools.
– Keep an Eye on Your Investment
Monitor how your REITs are doing, follow market trends, and adjust your investments if needed.
A team of writers and reporters decodes vast terms of personal finance and making money matters simpler for you. From latest initial public offerings (IPOs) in the market to best investment options, we cover al…Read More
A team of writers and reporters decodes vast terms of personal finance and making money matters simpler for you. From latest initial public offerings (IPOs) in the market to best investment options, we cover al… Read More
- Location :
Delhi, India, India
- First Published:
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