low transaction cost

REITs are a kind of trust organization established in accordance with legal procedures, which collects investors' funds by issuing stocks or fund units, and professional institutions manage the real estate and distribute more than 9% of the net after-tax income to investors. Simply put, REITs are listed companies that invest in real estate on behalf of customers.

REITs is a real estate investment trust fund, which collects investors' funds by issuing stocks or fund units, and real estate is managed by professional institutions, and more than 9% of net after-tax income is distributed to investors.

Six characteristics of REITs

1. In this way, REITs can bring continuous cash flow to investors every year. The United States generally pays dividends quarterly, while Hong Kong generally pays dividends every six months. It's like collecting rent, which is paid quarterly in the United States and half a year in Hong Kong. Because REITs have the legal requirement of mandatory high dividends, REITs are simply tailor-made investment tools for small and medium-sized investors to achieve financial freedom

2. The investment threshold is low and you can generally invest several thousand yuan. 1 lot of REITs in Hong Kong is 1 shares, starting from 1 lot. American REITs buy from 1 share. If you directly invest in real estate, it will take at least hundreds of thousands to get started

3. Generally, REITs will be exempted from corporate income tax because of low transaction costs. Investors only need to pay trading commission when buying and selling REITs, just like buying and selling stocks, they don't have to pay other high taxes. If you are directly investing in real estate, the tax for buying and selling should be between 1% and 3% of the house price

4. It is as convenient to buy and sell REITs as it is to buy and sell stocks. You can sell REITs at any time during the trading hours

5. Professional management REITs are all professionals in the real estate field. Their ability to manage property is generally much better than that of individuals. If we buy the property directly and manage it ourselves, it is probably not as good as the management team of REITs. Moreover, we still need to spend a lot of time and energy on real estate

6. The rate of return is relatively high. Compared with the rate of return of REITs, the stock will be a little less coquettish. Compared with directly holding the property, the rate of return of holding REITs is relatively high (15%-2%). For example, we now use 1 million yuan to buy an apartment in Beijing Oriental Haoting for rent, and the rental return rate will not exceed 3%. The annual rental income will not exceed 3 thousand.