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Real Estate Investment Trusts
Financial Markets

Real Estate Investment Trusts 

The investment space has myriads of opportunities that one could maximize on. However, it is important to understand different options that different markets offer and narrow down to a select investment such as Real Estate Investment Trusts (REITs). REITs present are alternative form of investment. Institutions and people have over the years shown significant appetite for real estate investing, which cements Real Estate investments as one of the dominant forms of capital appreciation.

Real Estate Investment Trust

Sometimes, pooling together funds to purchase a property whether on credit or cash basis can be challenging. As such, REITS front investment on property at low costs with low and distributed risks. Institutions and people can own a part of a property from investing in REITS. Capital invested in a REIT determines its returns. Different types of REITS exist and can be seen below;

a) Equity REITs (Revenues are mostly generated through rental income)

b) Mortgage REITs (Real estate owners are funded by mortgage REITS and earn their revenues through their net interest margins)

c) Hybrid REITs (A mix of both the Equity and Mortgage REITs)

d) Publicly traded REITs (REITS registered on stock exchange platforms where they can be bought or sold by the public)

e) Public-non traded REITS (Listed but not tradable and are not subject to market fluctuations unlike publicly traded REITs)

f) Private REITs (Not listed but tradable to institutional investors)

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