Investing in real estate has long been a path toward financial growth, but buying physical property can be expensive and complicated. Fortunately, there’s a more accessible way to tap into real estate income—through REITs or Real Estate Investment Trusts.

What is a REIT?

A Real Estate Investment Trust (REIT) is a company that owns or manages income-generating properties such as malls, offices, residential buildings, or warehouses. When you invest in a REIT, you’re essentially becoming a shareholder in these properties—without the hassle of property management or ownership costs.

REITs allow individuals to earn dividends from real estate without having to buy, maintain, or lease property directly. This makes it an excellent option for those seeking passive income and portfolio diversification.

How REITs Work

REITs function similarly to stocks and are traded on the stock exchange. Investors earn income through dividends, which are paid from the rental and operational profits of the properties held by the REIT.

For developers, creating a REIT is a way to raise capital. By transferring their assets into a REIT, they can offer shares to the public. In return, investors receive dividends while the company uses the capital to expand or improve its real estate portfolio.

5 Tips for Getting Started with REIT Investing

1. Know Your Financial Goals

   Before you invest, clarify what you hope to achieve. Are you looking for consistent income, long-term capital growth, or risk diversification? Understanding your goals will help you select the right REIT that fits your strategy.

2. Choose Reliable and Well-Performing REITs

   Research is key. Look into REITs with a strong track record, high occupancy rates, stable tenants, and consistent dividend payouts. Some publicly listed REITs in the Philippines include:

   • DDMP REIT (DoubleDragon Properties)
   • FILRT (Filinvest REIT)
   • RCR (Robinsons Land Commercial REIT)

   These REITs manage commercial centers, hotels, and office buildings that contribute to regular rental income.

3. Use Online Brokers for Easy Access

   Investing in REITs is more convenient than ever with online brokerage platforms. These tools allow you to buy and sell REIT shares, monitor performance, and access research tools—all from your phone or computer.

4. Select SEC-Accredited Brokers

   Always use accredited and reputable brokers to protect your investment. In the Philippines, popular online brokers include:

   • COL Financial
   • BDO Securities
   • MyTrade
   • UTrade

   These platforms often provide investment research and educational resources for beginner investors.

5. Understand the Risks Involved

   While REITs offer advantages like passive income and liquidity, they also carry risks. These may include:

   • Market price volatility
   • Vacancy risks if properties remain unrented
   • Impact of interest rate fluctuations

   To mitigate risk, choose REITs with a diverse property portfolio and experienced management teams.

Final Thoughts

REITs open the door to real estate investing without the high costs and responsibilities of owning property. Whether you’re just beginning your investment journey or looking to expand your income streams, REITs offer a flexible and accessible way to build long-term wealth.

Stay informed, invest wisely, and consider adding REITs to your portfolio for steady passive income and real estate exposure without the heavy lifting.