REIT (Real Estate Investment Trust)
| Offshore Financial Products | Offshore Center | Regular Savings | Health Insurance | Life Insurance | US Tax | Land Banking |
|---|---|---|---|---|---|---|
| Offshore Funds | Hedge Fund | Mutual Fund | Capital Protected Fund | Real Estate Investment Trust |
What is REIT (Real Estate Investment Trust)?
A real estate investment trust is an investment scheme in which funds collected from investors are used to purchase real estate properties and returns in the form of rentals and profit from eventual sales of properties are paid to investors as dividends. The scheme was introduced in the U.S. in the 1960s as a means to allow small-lot investors to invest in properties.
REITs seek out investment opportunities and actively manage real estate assets. REIT investors are not directly investing in real estate property, but instead own REIT units that are sometimes publicly traded. As such, REITs are attractive to those investors who wish to participate in the real estate sector without the illiquidity of direct ownership. Moreover, REITS can be used as an inflation hedge as rental rates tend to move with inflation over the long-term. REITs also benefit from the positive leverage inherent in borrowing at rates that are lower than the returns which can be earned on income-producing properties.
