What it is
A Real Estate Investment Trust or REIT is a public corporation that owns and operates real estate properties. These properties generate income by collecting rent and other fees from tenants.
Assets under REITs can include residential and commercial properties like offices, hotels, malls, and condominiums.
Their asset portfolio could also include infrastructure projects such as highways and powerplants.
What it means for you
REITs offer an opportunity to invest in real estate at a relatively low cost. You won’t need to shoulder the huge costs and effort associated with purchasing and managing a property yourself.
Since REITs are listed on the Philippine Stock Exchange, you can buy and sell shares just like regular stocks. This presents an opportunity to grow your money through capital appreciation.
Another way to earn from REITs is through dividends. REITs are required by law to distribute 90% of their annual earnings to shareholders.
Because of this, investing in REITs means you’ll receive regular dividends. Note that the amount will depend on the REIT’s income.
Before investing in REITs, it’s ideal to check the quality of its assets and history of paying dividends, among other things. You should also assess potential risks to see if it’s the right product for you.
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