Should you Invest In REITs

Should you Invest In REITs

REITs or Real Estate Investment Trusts are a category of investment that allows investors to invest in otherwise high valued Real estate and receive consistent income in the form of dividends. Finance Minister Nirmala Sitharaman in her budget speech on 1st Feb 2021 announced that the dividend on REITs is exempted from TDS in order to encourage investment from investors. This has brought the REITs investment to the spotlight. And for the information, REITs are new in the Indian investment forum but they are already popular among Other markets like the USA.

USA has launched the first REIT in 1961 and since then many markets have introduced REITs.

In India at present(as of Feb 14th 2021) there are Three REITs these are

1. Mind Space Business parks REIT
2. Embassy Office Park REITs
3. Brookfield India REIT

To More about REITs and Complete detail about financial planning using REITs, Visit Financial Planning section.

Advantages of Investing in Real Estate Investment Trusts

The advantages of Investing In REITs are

1. No TDS On Dividends as announced by FM Nirmala Sitaraman In a budget speech on 2nd FEB 2021. (This might change every year, Please check)
2. Steady dividend income and capital appreciation
3. Option to diversify
4. Investing in small quantities in High-value Real Estate Properties.
5. Liquidity while investing in Real Estate sector which outside real estate ownership is not that liquid.
6. Risk-adjusted Returns

Disadvantages of Investing in REITs

1. Low Growth Prospects
2. Market Fluctuations
3. Organizations Business management fees will be deducted from the Rent Income