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What’s the story
Real Estate Investment Trusts (REITs) are a great way to invest in real estate without having to buy property.
In India, REITs have become a popular choice for investors looking for diversification and steady returns.
They give you the chance to invest in commercial properties and earn dividends from rent, etc.
Here’s how you can invest in Indian REITs and make the most of this opportunity.
Understanding REITs in India
REITs are companies that own, operate, or finance income-generating real estate.
In India, they must invest at least 80% of their assets in income-generating properties.
They also have to distribute 90% of their net income as dividends to their shareholders.
This makes them an attractive option for those looking for regular income.
Choosing the right REIT
When investing in Indian REITs, it is important to choose wisely.
Look at the portfolio of properties owned by the REIT, its management team, and past performance.
Also, check the occupancy rates and rental yields of the properties under management.
A well-diversified portfolio can mitigate risks and ensure stable returns.
Investing through stock exchanges
Indian REITs are listed on stock exchanges such as NSE and BSE, making them easily accessible to retail investors.
You can buy units of a REIT just like you would buy shares of a company through a brokerage account.
Keep an eye on market trends and economic indicators that could affect real estate prices.
Tax implications of investing in REITs
Investing in Indian REITs also comes with tax implications that investors must be aware of.
Dividends from REITs are taxed at the hands of investors as per their income tax slab rates.
However, capital gains from selling REIT units are taxed differently depending on how long you hold them before selling.
Monitoring your investment
Regularly monitoring your investment is key to successful REIT investing.
Keep track of quarterly earnings reports, changes in property management or tenant agreements, and broader economic conditions that could affect real estate markets.
Staying informed will help you make timely decisions about holding or selling your units based on performance trends.