What a REIT actually is

If you've been through the real estate investing course, you already know REITs exist as one of the three main paths into property, alongside renting out units yourself and flipping. This course sets the other two aside and goes deep on REITs alone, assuming you're already comfortable with rental yield, cap rate, and leverage.

A REIT, real estate investment trust, is a company that owns and operates income-producing real estate: malls, office towers, industrial parks, warehouses, and similar buildings that generate rent. Its shares trade on the Philippine Stock Exchange like any other stock, so buying REIT shares means buying a slice of that company, and through it a slice of the rental income those buildings collect, without ever holding a title deed or negotiating a lease yourself.

The difference from buying one rental unit outright is scale. A REIT typically owns a whole portfolio, dozens of buildings, hundreds of tenants, sometimes several property types at once, run day to day by a professional asset manager. One vacant unit or one difficult tenant barely moves the needle on a portfolio that size, in a way it very much would if that unit were the only property you owned.

Buying a single rental condo might require a ₱500,000 down payment tied to one building, one location, one set of tenants. Buying ₱20,000 worth of shares in a PSE-listed office REIT instead buys you a small stake in dozens of office towers spread across several business districts, collecting rent from hundreds of corporate tenants at once.