Time to face-off some really low budget investing

Through a real estate investment trust, you can buy units in a technology park at a price as low as 50,000 rupees. (Representative image) You can start investing in real estate now for only 10,000 rupees, because the Securities and Exchange Commission of India (SEBI) has revised the Regulations on Real Estate Investment Trusts (REIT) and Infrastructure Investment Trusts (InvIT), 2014. 

According to the new rules, transactions can be conducted in one unit with a minimum application value of 10,000 rupees, and the minimum application value for REITs and InvITs is 15,000 rupees. The reduction in the number of lots keeps them in line with the stock market. Currently, the minimum investment for REITs is 50,000 rupees and InVITs is 100,000 rupees. Previously, the minimum investment limit for REITs was 200,000 rupees, and now it has been reduced to 50,000 rupees. REITs were first launched in India in 2007. Embassy REIT Executive Director Michael Holland said: "We commend the regulators for this proactive move to reduce commercial batches of REITs and InvITs. Embassy REIT went public in 2019, and our strong and resilient performance for the next 8 quarters has shown India REITs have paved the way for mainstream asset classes. In the past two years, approximately US$2 billion of major REIT stocks have been listed in India, and leading national and global asset management companies and an increasing number of retail holders now form the basis for REIT participant registration.

The number reduction will increase the liquidity of the entire REIT market, allow REITs a part of the national benchmark index, and allow more new institutional and retail investor groups to participate.

"What is a real estate investment trust (REIT)?

Mutual funds, REITs allow you to invest in real estate assets of a unit without owning physical assets. Companies pool investors’ funds and then invest in real estate on their behalf. In return, investors get A certain return and the capital appreciation of your investment. The most important thing is that REITs can be listed on the stock exchange.

Basically, REITs are divided into three types: Capital REITs that own and operate properties. The second is mortgage real estate investment trust funds, which invest in mortgage loans or mortgage-backed securities and earn investment income from their income. The third type is hybrid REITs, which are a combination of equity and mortgage REITs. 

What is an Infrastructure Investment Trust (InvIT)?

InvIT allows direct investment in infrastructure projects. The goal of InvITs is to promote the development of the infrastructure sector by encouraging more people and institutions to invest. The cash flow generated by InvIT is distributed to investors as dividend income. InvITs help infrastructure companies pay off debts. Like REITs, InvITs are also listed on the exchange. The important thing to remember is that SEBI does not allow guaranteed returns. It is always recommended to sit down and discuss with your financial advisor before investing in REIT or InvIT.