So How to Pick REITs...?

Hello viewers, welcome to Info Thirst. Today, we are going to discuss how to pick REITs (real estate investment trust). Before we get into the topic we would like you to Follow us by clicking the follow button. Now that you have done that...So let's dive into it…

If you aren't aware about REITs you can find out by clicking here.

So firstly why not buy shares of a Real Estate Company than invest in REITs?

- SEBI regulates minimum 80% fund to be invested in completed rent generating properties

- Max 10% in under construction properties, shares of developer companies etc

- Can’t invest in vacant land, agricultural area or property outside India

- 90% profits of the trust have to be distributed to the unit holders

- Dividend may be 5-6%

- Possibility of capital gains (remember, real estate cycles can be over 10 years long)

How to pick a REIT?

- Look at portfolio of commercial properties held and cities

- Promoter history

- Types of tenants in the owned properties - number and avoid dependency for rent on few tenants

- Weighted Average Lease Expiry (WALE) - contracted lease period

- Occupancy Ratio

- Be cautious of impact of COVID

- Financial ratios

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