Property vs REITs vs InvITs: What should you go for?

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Are you planning to invest in real estate? If yes, there are multiple options to choose from, i.e., should you invest in property, real estate investment trusts (REITs), or infrastructure investments trusts (InvITs)? Experts are of the opinion that is indeed a good time to enter the real estate space.

Niranjan Hiranandani, Co-Founder & MD of the Hiranandani Group believes that this is a good time to invest in property. He said that with home loan rates operating at 7% or below, people should seriously consider buying a house at the moment because these rates might not stay at these levels for long. He also affirmed that it’s a good time to buy property as an investment as well, with enough and more completed projects available.

Speaking to Money9’s Krishnakumar, Hiranandani stressed the comparison between different ways in which people can invest in property in the current scenario, with the options of REITs and InvITs also available to investors today.

“REITs & InvITs are good investment avenues for investors with a small corpus of funds and are looking at a short-term investment horizon of 3-5 years. Indian REITs have performed well since their launch a couple of years ago. The top realtor believes that the demand hit to office realty due to the Pandemic induced Work-From-Home policies will not have a negative impact on all 3 Indian REITs that are focused only on Office properties,” the co-founder at Hiranandani Group explained.

Currently, there are 3 listed REITs available for investment in India. These include the Embassy Office Parks REIT, Mindspace Business Parks REIT & Brookfield India Real Estate Trust. Also, there are nearly 15 registered InvITs in India.

Both REITs & InvITs are collective investment Vehicles Similar to Mutual Funds. Investors’ money is pooled in to buy realty assets, with them being assured of fixed regular returns. And similar to mutual funds, they too have a designated fund manager as well as a trustee.

While REITs in India mainly invest in Office Spaces, InvITs invest in various infrastructure projects across the country.