What you need to know about REITs
While alternative investments refer to investing in the private markets, little know about the various asset classes available. Let's look into one of the most popular alternatives - REITs.
What is REITs?
REITs (Real Estate Investment Trusts) are an alternative to buying real estate directly. Think of it as a mutual fund that holds various real estate projects. Suitable for investors who want exposure to the real estate market, but want the investment to be totally passive.
REITs typically pay higher dividends than stocks, and they allow exposure to a global real estate portfolio with a relatively small amount of capital.
PROS:
- Guaranteed dividends;
- Hassle-free real estate investing;
- Low minimums;
- Liquidity
CONS:
- No direct control over the properties
C-Reits set to be a game-changer
REITs have been a popular investment because of its guaranteed dividends feature. The recent pilot launch of the C-Reits will help fund the infrastructure projects in China and expand the asset class choices to local investors.
While the investment opportunities appear promising, there are challenges. For one, only domestic investors can invest in the infrastructure REITs as of now.
Not eligible for C-REITS? Explore more at Altive.