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How to invest in REITs: Even today in India, the common man likes to invest in land or property. However, investing directly in commercial real estate is not within the reach of the general public. If we tell you that you can invest in any major business center or office in the country for just Rs 140 and based on the amount invested, you will also get rent every 3 months, then you will not believe it. But this is true. Through REIT, you can earn money sitting at home. In simple language, Real Estate Investment Trust i.e. REIT is such a thing which is an easy way to invest in real estate.
Suppose you want to invest in the country's largest commercial center Bandra Kurla Complex (BKC), then you will have to spend crores of rupees, but you can invest in BKC indirectly through REIT. If a REIT buys property in BKC, then a common investor can become a unit holder in that property. At present, you can buy 1 unit of REIT for Rs 140 to Rs 385.
REIT gives you the opportunity to earn money by investing your money in real estate
It is like a company. The pattern of REIT is almost similar to that of a mutual fund company (AMC). In mutual funds, the fund manager invests your money in good companies/shares to give you returns, while in REIT, experienced professionals invest your money in good business centers or office spaces or malls in India and invest it in big companies in India and abroad and give rent to companies. Whatever rent comes from this, after deducting some expenses, all the money is given to the investors.
As per SEBI rules, REITs have to pay 90% of their earnings to investors. As per the rules, it is necessary to pay rent/dividend/distribution/rent to investors at least once in 6 months, but the good thing is that currently all the four REIT companies in India are paying rent/dividend to investors every 3 months. Rent.
Apart from rental income, the investor also gets the benefit of capital appreciation
REIT investors not only earn rent every three months but also benefit from capital appreciation as real estate prices rise. Capital appreciation happens in two ways: increase in property value and increase in share price. Suppose you buy a share in a REIT for Rs 100 and tomorrow the share price goes up to Rs 130, then apart from the rental income, you will earn an additional Rs 30.
REIT first came to India in 2019
The REIT model has existed in the world for quite some time. India joined the REIT model when the country's first REIT, Embassy Office Park REIT, was launched in March 2019. The latest REIT is Nexus Select Trust, which was listed on the stock exchange in 2023.
4 REITs listed in the stock market-
1. Embassy Office Park REIT- Closing price on September 20 ₹ 385.28 per share
2. Mindspace Business Parks REIT – Closing price per share on September 20 ₹ 349.54
3. Brookfield India Real Estate Trust- Sep 20 closing price of 1 share ₹ 275.35
4. Nexus Select Trust – Closing price of 1 share on September 20 ₹ 139.86
How to Invest in REITs
Just like you buy shares through the stock exchange, you can buy shares of REITs listed on the stock market. When the stock market closed on September 20, 2024, the lowest price per share of REIT was Rs 139.86, which means you can invest in property worth crores for just Rs 139.86 and earn rent from home.