What are REITs?

REITs are another instrument which I am also investing in to get the income stream beside stocks.

REITs are company that invest primarily in real estate & have tax benefits. To enjoy this tax benefits, they need to distribute at least 90% of their profit to the unit holders.

Therefore, they do not retain much of the profits for debt repayment, asset enhancement or acquisitions. Not to be surprise that our local REITs will issue rights to ask the existing unit holders for funding.

REITs can come in different types of properties, such as office, retail, industrial, healthcare and hospitality.  Each of them comes up different rental yield, risk and others.

For my own portfolio, I invest in various types for diversification purpose. And I will only invest when they are undervalue & also paying me a good yield depending on the sector they belong to.