REIT is a popular way of investing in real estate. The real estate has several variations and so there is diversity in the types of the REITs as well. The popular types of REIT are as follows:
1. Retail REITs
It is a popular type of REIT. A major portion of the REIT is used in commercial properties like the shopping malls. The main source of the money in case of the retail REITs come from the rent. The rent can be a problem for the REITs as there are certain constraints in this like the non-payment of the rent. Sometimes the property is not occupied for a long time and the situation gets worse financially for the REIT. The main objective of the retail REIT is to get the maximum benefits out of the property. The purpose is fulfilled when the investment involves a potentially strong tenant.
2. Residential REITs
These REITs cover the spaces that are occupied by multiple people as accommodation. The benefits enjoyed against each of these properties depend upon the location of the property. Usually, the urban areas that offer better living standards have more benefits for residential REITs. The size of the population in these areas are always increasing and so there are more chances of getting better advantages from the residential REIT.
3. Healthcare REITs
Healthcare REITs are a recent addition in the list of the Healthcare REITs. As the population is growing rapidly all over the globe therefore the related issues are becoming complex as well. Like many other issues, the health of the people is of utmost importance. The things have become complicated as the people are likely to experience more serious health conditions. To manage all this more health care units are being constructed. This increasing trend has introduced the concept of healthcare REITs.
4. Office REITs
As the name indicates this kind of REITs is specifically meant for the sites that are meant for the offices. The source of the income is nothing else but the payment that comes from the tenants. What is essential in this regard is the duration of the lease. The rental income is taken from the tenants who have entered into a long time contract of lease. Before actually enjoying the benefits of the office REITs the client has to consider the economic conditions, unemployment and vacancy rates, local economic conditions, and the major capital required for getting the property. 5. Mortgage REITsThis category of REITs is related to the property that is mortgaged. It has different conditions as compared to the other types of properties.