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Starting a Real Estate Investment Trust: REIT Investing for Beginners


If we talk about investments, it is 100% sure that the topic of Real Estate will pop up. Real Estate is undeniably one of the best form of passive income investment that one can have. However, acquiring one is a difficult and expensive process.

Starting a Real Estate Investment Trust: REIT Investing for Beginners
"house-real-estate-building" by image4you is licensed under CC0


So how can you have Real Estate as part of your investment portfolio? The answer is via REITs or Real Estate Investment Trust.


What is REIT?


Basically, these are companies that own and manage real estate properties and mortgages portfolio.


Benefits of Investing in REIT?


  • Investing in REIT offers the benefit of owning a Real Estate without having to be a landlord.
  • Real Estate ownership without the headaches or expenses of being a landlord.
  • Liquidity, you can easily buy and sell shares.
  • Diversity, investments are scattered to different real estate properties, so you will face less financial risk.
  • REITs are mandated by law to distribute 90% of its distributable income to its investors. Meaning, there will be a steady dividend income.


How Can You Invest?


Here in the Philippines, we have the first REIT company and that is Ayala Real Estate Investment Trust (AREIT). The company started its IPO on July 27 and will end on August 3, 2020 at Php 27.00 per share. You can avail the IPO or wait for the stock to be publicly traded.


Is It a Good Buy?


The straight forward answer is we really don't know. If your goal is to purely trade this stock, then it is difficult to gauge the price situation because of the lack of historical data. But if your goal is to have a passive income stream, then this is a good addition to your portfolio.


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Given the current situation, your apprehension to invest to an asset class that is greatly affected by the pandemic is understandable. However, you know also that this situation will eventually pass.




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Warren Buffet



- Your Life In Perspective by Ælfræd (Elf Counsel)

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