What are some risks that I should think of when investing in REITs?

If you are talking about REITS and its risks, it means you are looking at the risk of stocks and also the risk of real estate investment.

For reits, there is

• vacancy rate

• weighted lease average expiry

• cost of debts

• tenant concentration risk,

• country risk

• geographical risk

• industry risk

• gearing risk

• political risk

• legal risk

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Hello!

Some risks include;

1) Interest rate risk

There is the risk of interest rates when it comes to risk. With a higher interest rate, there is usually a fall in demand for REITs. Based on historical data, it has been found that REITs do not perform well when there is an increase in interest rate

2) Market risks

REITs are traded on the stock exchange hence making their prices subject to demand and supply conditions. Therefore, their prices are usually a reflection of the confidence that investors have in the econoomy.

3) Concentration risk

If a large portion of the REITs value is from one or a few properties, if something happens to one of it, your risk of loss would be much higher

Hope this helps!