Two ways to own property
You can buy property directly, which needs large capital and hands-on management, or invest through a REIT, a real estate investment trust. REITs own portfolios of apartments, offices, warehouses, data centres or shopping centres and pay most of their income to investors.
Why investors add it
- Regular income from rent.
- Potential protection against inflation as rents rise.
- Diversification away from stocks and bonds.
What to watch
Property is sensitive to interest rates and the economy. Different property types behave differently: warehouses and data centres have grown strongly while some office space has struggled. Selection matters.
Key takeaways
- REITs give property exposure without owning buildings.
- They pay out most income as dividends.
- Interest rates strongly influence property prices.
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This lesson is general education and not personal financial, tax or legal advice. Investing involves risk, including loss of principal.