Benefits of REITs
Generous Yields
REITs primarily earn through rental income of its properties. They also earn by adding more properties.
Regular Income
Income of REIT companies are exempt from 30% corporate tax as they are required to pay out 90% of their earnings in the form of cash dividend to REIT investors.
Affordable and simple
You get the benefits of a property owner, without the high cost of acquiring them and all the headaches of operating them.
Easy to BUY and SELL
After its IPO, REITs will be traded in the Philippine Stock Exchange.
Risks of REITs
If rental demand weakens, the REIT company will have lower income due to higher vacancy and lower lease rates. This means the REIT company will pay less dividends to investors.
REITs become less attractive when interest rates go up to levels that make other traditional fixed-income products more attractive.
Keep in mind as well that REITs are traded like stocks, so its price can also go up and down.
To help you better understand REITs, you can read our research reports on REITs by logging in to your COL account and clicking on the Research tab.