Despite real estate tried treasure and retits offering liquid, diversifificification, and professional management, Berkshire Hathaway has always invested in them. Famous exceptions include small positions in store capital properties and Seritage growth. But compared to deep berkshire bets to companies such as Apple, Coca-Cola, and American Express, READ exposure is not neglected.
Why? According to the buffett and her long with Charlie Easethe reasons are straightforward.
A factor that causes is a lack of a competition. The buffett and her long spouse Charlie Munger always focus on their investments in areas they believe they have an advantage. In the most competitive and efficient real estate market, Buffett is arguing that there is little opportunity to find mischievous properties. As Malung said, “We have no competitive advantage than experiencing real estate investors in the field.” Then there is tax angle. Berkshire Hathaway, a tax C-Corporation, faced an additional corporate tax layer of any income that it earned from reats or real estate investments. It weakens most of the tax recovery that makes retits attractive to individual investors. As Mulung explained, this structure makes real estate a “fun investing” for them.
Another reason why is return. Buffett is looking for businesses to make a long accidental return to invested capital and restores profits at the same rates within the period. Real estate rarely meet this threshold. Given the quantity use of leverage and real estate leverage as a perceived safe asset type, cap rates – the unintentional return – in the middle of the middle-one number. For the Long-term model of Berkshire, that is not enough.
But not working for Berkshire Hathaway can still work for you.
In India, note captures traction as a useful, effective tax, and regulatory operated by physical ownership of real estate. Thanks for their way through the structure, the income made by Indian Rets, such as renting or dividing from the special purpose of the sourses, not only at the level of investor. It avoids the problem with double taxes and enlarges effective returns.Dvidend Payuts from reits that don’t have taxes in the investor’s hands, which have already paid corporate taxes. That makes healing a clean, more efficient sources of cash flow for individual investors, especially those who seek passive income.
On Capital Gains, REIT UNITS Held for more than one year qualifying as long-term capital assets and are taxed at just 10% on gains above RS 1 lakh, much lower than the rates typically property sales or other equity-like investments. Capital shortages are short (in units sold within a year) tax at 15%.
In addition, the reits listed in India are required by the Securities and Exchange Boards in India (Sebi) To distribute 90% of their net discussion income, ensure steady streams of income for investors. They also offer a better liquidity and transparency than real estate-reit units of stocks in stock exchanges such as showers to enter and exit positions easily.
GST, often a complex factor of real estate investments, indirectly affects rental income or the returns distributed to reit investors. And while the tax convergence is applied to some reit repair components, the overall structure remains efficient and the investor friendly.
So the bottom line is that the causes of Warren Buffett for avoiding reeds from the scale of Berkshire Hathaway, phirakakhong tax. But for Indian investors, especially those who seek constant income, tax efficiency, and a liquid alternative to traditional real estate, retails with an inspiring case. With favorable taxation, support that is supported by SEBI, and growing interest in institutional, retits can be a wise addition to your portfolio, even if they are not part of the buffett.
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(Disclaim: Recommendations, suggestions, views and opinions given to experts themselves. It does not represent views of economic times)
