Real Estate Investment Trust – REIT
Real Estate Investment Trusts known as REITs are entities that invest in different kinds of real estates or real estate related assets.
Real Estate Investment Trust is a security trust that deals as a stock for the major exchanges and make the real estate investments directly or through properties and mortgages.
Real Estate Investment Trusts receive special tax considerations and they typically offer investors, a highly liquid method of real estate investment. The three major types of REITs are:
Equity REITs:
Equity Real Estate Investment Trust is a most common type of REIT that invests in or own real estate and their revenues comes from the real estate property rents. Thus, they are responsible for the equity or their real estate assets.
Mortgage REITs:
Mortgage Real Estate Investment Trusts lend money to owners and developers or invest in financial instruments secured by mortgages on real estate. REITs loan money for the mortgages or directly purchase existing mortgages or mortgage backed securities. Revenues are generated primarily from the interest that they earn on the mortgage loans.
About Commercial Real Estate Projects
Hybrid REITs:
Hybrid Real Estate Investment Trusts combine the real estate investment strategies of both the equity REITs and mortgage REITs by investing in both properties and mortgages.
Individuals can invest in Real Estate Investment Trusts wither by purchasing their shares directly or by investing in a mutual fund that specialize in public real estate. An additional benefit to invest in REITs is the fact that many are accompanied by Dividend Reinvestment Plans (DRIPs).
Usually REITs trade on national exchanges or in the over-the-counter market. Real Estate Investment Trusts also invests in shopping malls, office buildings, apartments, warehouses and hotels.
Real Estate Investment Trust in India:
India is currently in the process of formulating definitive legislation for introduction and smooth function of REITs in the Indian real estate markets. Once introduced, it will help the Indian investors enjoy the benefits of owning an interest in the securitized real estate market. It will be best time for the investors to own a share of profiting market economy as the current real estate boom and the market being flooded with various real estate companies in India.
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