Essay On Pros And Cons Of Real Estate Investment

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Pros and Cons of Real Estate Investment Trusts

Real estate investment trust provides the opportunity to the investors and the traders to include the real estate in their portfolio. In addition to this some of the real estate may provide high profit whereas other may also be risky.

But, there are some risks which are associated with the real estate investment trusts which are not traded. As they are not traded on the stock exchange by the investor and the traders and hence the risk associated with this type of real estate is special type of risks which are:

• Lack of liquidity risk: Real estate investment trust which are not traded are not liquid in nature. This type of real investment trusts are not directly sold in the stock markets or open markets. If any investors or traders need to make profit with this type of assets at a quicker rate
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As the real estate investment sectors could be publically listed it can give liquidity to the investors and the traders in the similar fashion as that of mutual funds. The minimum initial investment which is required for the initial public offering of the real estate investment sector is Rs 2 lakh.

Low investment during the initial stage, liquidity in the investment, fixed generation of income, increase in the capital these are all the advantages of the real estate investment trusts. In India there is large number of semi developed commercial properties. Once if real estate investment trust will start working some of these semi developed commercial properties will come in the market and it will be developed. These will also help the developers to complete the projects which are stopped.

There could be a reflection of these types investments into stocks. But in reality the real estate investment trusts will benefit only the specific developers and will also bring exposures in the commercials

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