Real Estate Investment Trusts are those trust in which people feel free to invest money. They return a profit in a large amount that’s why it is more popular in the US because the people are more aware of these trusts.
Understanding of REITs:
This concept of real estate investment trust was first time introduced in the US before five decades. Nowadays this concept has gained much popularity due to its successful background. REITs are the company that has its property or produce profits from rich income real estate. Those real estates that give you more profit. these companies have to meet all the demands to acquire this position in the market. It is mutual funding it allows the managers to take part in this trust and earn profit from the fund managers. Most of the REITs investment occurs in the Stock exchange companies or markets. that promise the investors for double profit.
Historical Background:
In the 1660s, this real estate trust was initiated in the US when people are less aware of the concept of investment. The Act of REITs came into existence by President Eisenhower. The main concept of REITs is to give benefit to the investors or who have their real estate. before introducing this company, the people who invested in commercial real estate were richer. But now the return benefit is a little bit low because every individual knows about the investment process and its implementation. This system of investment first developed in Unites State but now other countries like Hong Kong, Malaysia, and Australia are also get benefitted from this system of REITs.
Benfits of REITs:
As we invest in the real estate give us profit but now we will see that what benefits this company gives to the people if they invest in this company. There are the following benefits of this company:
•Liquidity:
The first and foremost benefit of the REITs is Liquidity. It means that people will get good returns when they do investment or funding through this company. There is a small risk of getting lost through the REITs investment. When people are satisfied after investing, still it takes weeks to give money to the real estate holder. It is heard by the estate market that investors are really satisfied with investing in the trusts because of the unusual profit that gets from the real estate. These trusts can buy and sell stock like bonds and other currencies.
•Diversification:
The second benefit of the real estate investment trust is the diversification. It means that these trusts give more opportunity to the small investors. There is a high requirement of commitment in the financial matters between the buyers and the seller. Some people thought that it is a dangerous thing to give your money to companies for profit. There is a chance of risk existing in this field. That’s why people or investors always start with a small investment in one company and might be increased after getting more profit.
In short, REITs give benefit on one side but there is a chance of loss exist in this field that is unusually unbearable for the investors.
