Shahid Balwa Elucidates: Are REITs an effective investment strategy in 2019?

by Dynamix Group Writer

Real Estate Investment Trusts or REITs are an important investment tool to receive long-term returns on property portfolios. Investors can take part in much larger project size and reap the benefits as it earns back. Industry leaders, such as Shahid Balwa DB Realty, guide investors about the right strategies to deploy when working within the space.

REIT allows multiple investors to diversify their risk profile as well as participate in a much wider spectrum of properties. They also allow smaller investment sizes, giving a broader spectrum of investors a chance to gain from the real estate sector. They are a common product utilized to influx capital into rent-yielding commercial properties and are prevalent across the country.

Lower risk in REIT

Developers have to put 80% of their capital into income-generating projects, thereby providing direct influx to the investors. Commercial spaces, offices and rental accommodations are given priority within the model, thereby reducing the risk of investing.

There is also greater transparency within the system, as there are clear guidelines provided for the protection of investors. REITs have to diversify their portfolio by investing capital into at least two projects, with up to 60% into any single one. Investors can take advantage of these benefits by opting for a low-risk REIT investment.

Investors can also research key developer profiles to gain more information about their background details. Research can be performed by searching for online resources such as Shahid Balwa Wikipedia to gain more confidence in the developer. This helps lower risk significantly within the domain of real estate investing.

Consistent income longer-term

REITs provide a consistent source of income to investors looking for a better investment approach. They can be compared with mutual funds, in the way that they are formed. Since they provide consistent income to investors, they are seen as a favourable investment profile in 2019.

The guidelines dictated by Securities and Exchange Board of India (SEBI), ensure that REITs distribute 90% of their income twice a year. This adds a stable flow of capital back into the pockets of the investors. It’s an ideal avenue for retail investors that want to generate steady income on a regular basis.

Proper authorization and registration

For developers to work within the REIT framework, they have to incorporate the proper authorization from SEBI, while remaining compliant with their prerequisites. Unorganized developers or unregistered players can not enter the REIT space, adding to the overall trust within the system.

From their registration to their offering documentation, all the information is available to investors from across portfolios. This empowers the buyers to make an effective investment decision based on project-determined factors.