Nuruddin Villa Case Study

Real Estate Investment Trusts (REITs)

Real Estate Investment Trusts (REITs) have become the buzzword when it comes to investing in real estate. They have provided above average returns in countries like the United States where they were first implemented. This has led to the growing popularity of the Real Estate Investment Trusts (REITs) and today more countries in the world are adopting this investment structure. In this article, we will explain in detail what Real Estate Investment Trusts (REITs) means and why they provide a more beneficial way to invest in real estate than other legal structures.
Concept of Real Estate Investment Trusts (REITs)
About five decades ago, the concept of Real Estate Investment Trusts (REITs) was first introduced in the United States. Ever since, this idea has grown tremendously in terms of market acceptance. REITs have gone from being an alternative investment class to being an investment class that has become the choice of the majority.

The concept of REITs is simple. Just like a mutual fund allows investors to benefit from diversification and professional expertise of the fund managers, so do these trusts. These trusts pool in the money collected from a lot of investors. Then they use money from this pool to invest long term in properties. However, the individual investor need not be in for a long term investment. Real Estate Investment Trusts (REITs) have a secondary market. Therefore, any individual investor call sell their share of the investment to other investors in the market at the ongoing price.

Since prices for shares of Real Estate Investment Trusts are quoted on a real time basis, these trusts provide the individual investor with much needed liquidity that is usually absent when one makes real estate investments.