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Please in simple terms what is a Real Estate investment trust, reit, and how does it work, what does it do? |
Please in simple terms what is a Real Estate investment trust, reit, and how does it work, what does it do? In simple terms, U can consider it as a kind off mutual fund to invest in real estate.ie.Few guys get together,forms a trust and invests the cash inflows into real estate.For eg,If u take a charitable trust,there are clear laws on from where to raise funds & how to utilise(ie 75% of inflow to be utilised in a year).Likewise there'd legislation pertaining to reits,which wud lay down, frm where,how to raise funds & regulations on investments which can only be in the real estate. we all get together and put some money into a fund. Then we buy Real Estate from the fund. That spreads the risk out on seperate buildings and spreads the investment out over a large group so that no one thing will hurt the group. |
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