REITs are something which is trending lately, they mainly trade on stock exchanges. In traditional real estate, you may get locked for long term, but REITs are based on total-return investment. You can easily enjoy more benefits as they give dividend yields with moderate or long term benefits. The long term benefits of REITs are much similar to the traditional stock values, but here you can enjoy lower risk comparatively.
Because of the dividend investments, most of the people prefer investing in REITs. REITs attract more retired individuals, because they are the ones who look for continuous income. Most important reason why people prefer REIT is that almost 90% of their income is divided to the share holders.
Advantages of REIT
The benefits of investing in REIT include:
- Long term benefits: Like stock values, REITs also offer healthy long term total returns.
- Dividend benefits: Since REITs are dividend, they have proved to yield steady and continuous income from various market sources.
- Trades: You can find shares of the REITs are traded with good values on the stock exchanges.
- Transparency: Unlike traditional ones, REITs can be monitored by any people including Directors, auditors, analysts and media, so you can make a decision based on the current financial condition and add protection for your funds
Knowing about REITs is very vital when you decide to invest on any equity or planning for any steady income. Overall risk status is low when compared to other stocks. Their ability to yield results from dividend fields make more income with long term appreciation. You can consider investing through any companies or mutual funds. There are numerous opportunities for small scale industries in REIT .So when you decide to invest through some companies, then there are more types in it. Here are major types of the companies:
- Retail REIT
Shopping malls and freestanding malls are the main market for retail REITs. So when you decide on investing in retail REITs, be absolutely sure about the industry by brainstorming the market. Around 25% of the REITs investments are in retails.
- Residential REIT
Residential apartments like 2 BHK and 3 BHK flats in Pune, Mumbai and Bangalore, buildings, and housing units falls under this category. When you decide to invest on this REIT, you should take many points under consideration like knowing about the apartment, markets, their future, etc.
- Healthcare REITs
REITs in health care field invest in the facilities like hospitals, nursing facilities, medical centers, and old age homes. The main success of this business is directly associated to the success of healthcare system itself. Most of the functionality of these facilities depend on fees, medicaid reimbursements, Medicare and individual medical bills.
- Office REITs
Office REITs mostly invest in buildings like offices, commercial spaces. They get rental income from the occupants monthly or leases which are signed long-term. These are now becoming more popular in tier 2 cities because of space crunch in larger cities.