What is REIT ?
REIT is an abbreviation of Real Estate Investment Trust. REIT is a fund that develops, purchases and sells income-generating real estate projects.
REIT (Real Estate Investment Trust) allows individuals to invest in large-scale properties in the same manner as they invest in other industries through shares. It works on mutual funds and provides every investor with regular income, diversification and long-term capital appreciation.
Under REIT, the management collects money from individuals and investing institutions to buy real estate projects. Entire project is further divided into “Units” and each financial contributor becomes a unit holder, who further earns a share of the income produced through the real estate development without actually having to buy property.
How does it works?
Any real estate company or Trustee purchases and enlists a real estate project to invite investors only after learning about the property valuation. Trustee divides the development into units. After that it invites Individuals and financial investing institutions to make investment in REIT schemes, who will be benefited in terms of income produced through the said real estate development. The income earned through the development is distributed among dividends.
Types of REIT?