How REITs safeguard and benefit their stakeholders

Real Estate Investment Trusts (REITs) are expected to safeguard and benefit their stakeholders. REITs are for investors. Credit: commonfloor

Summary:

One of the most common problem in real estate investing is that of unaccountability and trust. A lot of people who have invested in plots through real estate companies have been at the receiving end of frauds. REITs are better regulated and managed and you do not have to research and find out in person about properties. Your REIT managers will do all this and more.
Unlike direct real estate investments, real estate investment vehicles like REITs do not have the extra onus of maintenance, damages and more. There is appreciation in its purest form, much like shares. In other words, there is more liquidity. You can sell your shares and cash out, instead of facing the burden of selling properties that are susceptible to fluctuating prices, maintenance charges, brokerages and more.
REITs should pay a minimum of 90% of their income as dividend cheques to their investors. This is a huge bonus and safeguards the investor thoroughly. REIT managers cannot cut down dividends to make profits. Whatever their profits are, they should not lower dividends to a level below 90%.
Despite avoiding the pressures of actual ownership of property, as a REIT investor, you are holding a tangible and physical property. As an investor, this raises your profile’s credibility, as this business is all about returns.
REITs generate very high yields and this is a boon for dividend investors.