What is a Real Estate Investment Trust?
REIT, pronounced “reet”, stands for “real estate investment trust” and more than 87 million Americans actively own shares in various REITs, according to the National Association of Real Estate Investment Trusts.
Originated in the US in 1960 and quickly followed by Australia in 1971, Canada 1993, Japan 2001, Germany & U.K. 2007, REITs have been allowing people to invest in income-producing real estate (or mortgages) without having to buy, manage or finance the property themselves.
What does REIT do?
It’s a company that owns, operates, and finances a group of incoming-producing properties. These groups of properties are referred to as portfolios, and REITs can invest in a wide range of property types like apartment buildings, offices, commercial stores, warehouses, and more.
How do REIT shareholders make money?
REITs make money through rent collected from the tenants that occupy the buildings in that portfolio. When REIT owns a building, leases the space out, and collects the rent, the company (or REIT) generates income.
According to law, REITs must receive at least 75% of their gross income from real estate-related sources, invest at least 75% of their total assets in real estate, and distribute no less than 90% of their taxable income every year to their shareholders by paying dividends.
Because of this, REITs mainly invest in residential, hotel, and office building properties. This is the type of REIT that Metain is following.
Why should I invest in REIT?
REITs were originally created with the intention of helping the average person diversify his or her assets.They have steady performance and low risk, providing a way for people to invest in real estate without having to purchase a property directly.
REITs are listed on exchanges, and just like stocks, they have ample liquidity.
Why Vietnam real-estate market?
Over the last 20 years, Equity REITs (FTSE NAIREIT index) have delivered an average total annual return of 10.66% — compared with 6.19% and 7.77% for the Russell 1000, and Russell 2000 indexes, respectively (Source: NAIREIT analysis of total monthly returns through June 2019).
In Vietnam, this average growth rate of the Real Estate market is 15%–25% year-over-year. This outstands the growth rate of most markets in the world and allows an appealing investment opportunity for retail investors.
About Metain
Metain is the first co-investment platform that is highly profitable, transparent, safe, and powered by blockchain technology, where crypto investors can find shelter for their hibernated assets during the winter.
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