When considering what to invest in, most Kenyans think of buying land, shares at the NSE or even starting a business. The more informed investor may consider government securities, Treasury bills and bonds or Mutual Funds. Other than these there are other investments collectively considered Alternative Investments, these include forex and commodities. Today we will concentrate on one of these alternative investments; Real Estate Investment Trusts (REITs).

What are REITs?

A Real Estate Investment Trust is a company that owns and manages a portfolio of real estate properties and mortgages. The shares in a REIT can be bought or sold publicly on the NSE. They offer the benefit of being able to invest in real estate without the responsibility of chasing after rent payments-being a landlord. REITs pay out, at the very least, 90% of their taxable income to its shareholders as dividends. Basically REITs are mutual funds that only invest in Real Estate.

For more information read on How REITs work tomorrow.