Though buying real estate is costly and comes with many obligations, it is a common investment in India. Suppose you could invest in real estate without really owning a building? Here is where an equity REIT finds application.
What is an equity REIT?
An equity REIT, or Real Estate Investment Trust, is a business owning, running, and profit generating real estate assets. Commercial buildings, shopping centers, offices, hotels, or even residential complexes can all fit these characteristics.
Investing in an equity REIT is not purchasing a property. Rather, you are purchasing a piece of a business with multiple real estate holdings. Dividends—which result from rent paid by the REIT—earn you money.
Why Equity REITs Are Getting Increasing Popular in India
Though they are still novel in India, REITs are gradually gaining popularity. Introduced the REIT structure in 2014, SEBI (Securities and Exchange Board of India) has seen many investors benefit from making equity REIT investments ever since.
The following explains why Indian investors enjoy REITs:
- Low expenditure cost: You need not lakhs of rupees. You can get going even with a tiny amount.
- Regular income comes from dividends, which give consistent returns.
- Liquidity: On stock markets, REIT units are simple objects for purchase and sale.
- You invest in a pool of properties rather than one single property in diversification.
Advantages of funding an Equity REIT
- No property issues here. There is no handling tenants, repairs, or maintenance here.
- Professional management: Experts oversee properties.
- Transparency: SEBI controls listed REITs, thus you get regular and clear updates.
- Rent from real estate produces consistent income.
Notable Points to Remember
- There are market risks associated with REITs.
- Equity REIT dividends tax depending on your income slab.
- Property values vary and have an impact on returns.
- Before making an investment, review the REIT’s portfolio.
Closing Notes
Without buying real estate, an equity REIT presents a clever and simple approach for one to participate in India’s expanding real estate market. REITs can be a fantastic choice if you wish consistent income, low entry cost, and professional management. Just be sure you choose a decent REIT listed in India by knowing how it operates.
