Real Estate, REITs & InvITs
Own property without buying property — and rethink what real estate means.
Real estate has built more Indian wealth than any other asset class — and also locked up more capital. REITs and InvITs let you own income-generating real estate and infrastructure in small units, traded like stocks.
🏠Direct property — the trade-offs
A house you live in is a home, not an investment. A rental property is an investment with real headaches.
- Rental yield — Indian residential yields are just 2–3% p.a. pre-tax.
- Hidden costs — Stamp duty 5–7%, maintenance, vacancy, repairs eat the yield.
- Illiquid — Selling can take 6–18 months and 1–2% brokerage.
🏬REITs — real estate, demat-style
A REIT owns commercial properties (offices, malls). You buy units on NSE/BSE, get rental income as quarterly distributions.
- Entry — ₹300–500 per unit. No paperwork, no tenants, no plumbing.
- Returns — 6–8% distribution yield + capital appreciation. Indian REITs: Embassy, Mindspace, Brookfield, Nexus.
- Rule — SEBI mandates ≥80% in completed, income-producing properties; ≥90% of income distributed.
🛣️InvITs — for infrastructure
Same structure as REITs but for roads, power lines, gas pipelines. Higher yield (8–10%), more sensitive to tariffs and regulation.
Risk & 5-Year Returns
How these compare
Indicative 5-year CAGR (2020–2025) and typical risk for the instruments discussed in this topic.
| Instrument | 5Y CAGR | Risk |
|---|---|---|
REITs (Indian) Rental yield + price. Interest-rate sensitive. | 7–9% | Medium |
Residential Real Estate Illiquid. High transaction cost. Location-dependent. | 5–7% | Medium |
Past returns do not predict future results.
See full comparison on Portfolio →Micro Pro Tips
- 🧮Compare yield to FD — If a REIT yields 6.5% and FD gives 7%, the REIT only wins if you also expect capital appreciation.
- 🏗️Don't put 80% in one flat — Concentration risk is the biggest mistake Indian families make with real estate.