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Imagine owning a share in India’s biggest office parks, malls, or business complexes—without having to worry about tenants or property maintenance ever. That is what Real Estate Investment Trusts (REITs) facilitate. More and more platforms are making it simple to get access to REITs via mutual funds and direct listing on the market, becoming increasingly attractive for retail investors.
REITs pool money to invest in income-generating property
REITs work similarly to mutual funds—but instead of stocks or bonds, they invest in property. Most listed REITs in India buy commercial properties like business parks, tech parks, and upscale office buildings. Rent income earned from tenants is distributed to unit holders, and your investment gains value over time according to market performance and occupancy rates.
You can start with a minimum of ₹10,000
One of the largest benefits of REITs is that they’re within reach. And you don’t need to make big investments to buy property—you can start with a few thousand. Some mutual funds and small platforms let you invest in REITs with ₹100-₹500 SIPs. Direct listings like Embassy REIT or Brookfield REIT require a somewhat higher minimum, but even that’s far less than buying property. They are ideal for first-time investors.
Check the yield, not the price
Just like with fixed deposits or rental homes, what matters is the yield—how much income you’re earning each year. Indian REITs typically offer a 6-7% annual distribution yield, though it can vary. Don’t just focus on the market price; look at the payout track record, occupancy rate of the buildings, and the debt levels of the REIT. These factors affect both income and long-term stability.
Understand the tax laws before investment
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REIT income is taxed as well as exempt. Dividend income is exempt if the REIT distributes from exempt income, but interest income will be taxed at your slab rate. Capital gains on selling units are taxed at 10% (long-term) or 15% (short-term). For mutual fund-based REITs, the taxability will differ based on the structure of the funds. Take a glance at Section 115UA provisions or seek advice from your advisor before investing big chunks.
It’s property, but it’s volatile nonetheless
Although REITs offer exposure to real estate, they’re still stock exchange-listed. The prices will rise or fall as equities—especially with a change in interest rates or an economic slowdown. They’re safer than small-cap stocks but less stable than FDs. Use REITs as a component of a diversified portfolio, not as a replacement for savings or traditional real estate.
FAQs
Q. Can I invest in REITs with my broker?
Yes, REITs are listed on the NSE and BSE as stocks. You can buy them with your regular demat account.
Q. Do REITs provide monthly returns?
Most Indian REITs pay income on a quarterly, not monthly, basis. Check the payout schedule in the REIT investor factsheet.
Q. Is this better than holding a flat on rent?
REITs provide liquidity, low entry point, and no maintenance hassles—but flats can provide better control and long-term appreciation potential. It is up to you.