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Saturday, July 25, 2020

Investing in REITs: What are REITs? How do you earn from them and how do you invest in them?

What are REITs?
REIT stands for Real Estate Investment Trust. A REIT is a company that owns and operates income-generating properties like condos, offices, hospitals, hotels, and warehouses.

How do you earn from them?
When you buy REIT shares, you earn from them in two ways:

  • Through regular cash dividends, since 90% of the REIT's earnings are required to be given to their investors or shareholders

  • Through price appreciation, since the price of the REIT shares can also go up as the REIT company grows
To read our full REIT guide,
Why should I consider buying REIT shares?

You should consider investing in REITs if you want an investment product that has regular dividends and with share price upside. (Share price upside or price appreciation means that the price of the shares you buy can increase over time as the REIT company earns and grows.)

Basically, you get the benefits of being a property owner with regular rental income, all without having to pay a large amount of money to purchase property and without having to operate and maintain the property.
How do I invest in a REIT?

There are two ways to buy REIT shares:

1) You can first invest in a REIT by subscribing to its Initial Public Offering (IPO).

You can subscribe to an IPO either through COL or through PSE EASy, the online IPO subscription platform of the Philippine Stock Exchange.

2) After the IPO, the REIT shares become listed and available on the Philippine Stock Exchange, which means you can now buy and sell them using your COL account.

Source: COL Financial

This is not an investment advice and The Filipino Investor shall not be responsible or liable for any trading or investment decisions made based on this information.

The Filipino Investor hereby expressly disclaims any responsibility for any error or inaccuracy in the information.

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