What benefits do REITs offer investors?
REITs offer investors the following benefits:- (a) Ownership of investment grade real estate By pooling capital sources, REITs can invest in large-scale investment grade commercial properties, which are typically out of reach of the ordinary retail investor. By investing in a REIT, an investor owns a ‘pro-rata’ share of the trust. (b) Professional management REITs are typically managed by experienced and professional property managers. These managers are in turn overseen by an independent trustee and regulated by the Securities Commission. (c) Stable dividend returns REITs typically provide relatively stable cash flows since the majority of its revenue is generated by rentals under the terms of lease agreements with its tenants. These agreements are for specific durations, and may be subject to tenancy extensions. (d) Potential capital appreciation In addition to distributing dividend income at regular intervals, REITs also provide an opportunity for capital appreciation via any increa
