Like investment funds, real estate investment funds allow both small and large investors to acquire ownership of real estate companies. It is governed by legislation that aims to provide strong investment opportunities and income. In other words, it is similar to the shares that are traded on the market. More recently, between March 2013 and March 2016, the three-year average for REITs was in line with the 20-year average of 11.21% during this period. Historically, investors looking for yield have invested better in real estate than fixed-rate securities, the traditional asset class for this purpose. A carefully constructed portfolio should take both into account. A real estate investment trust (REIT) is an investment fund or security that invests in income-generating real estate. The fund is managed and heard by a company of shareholders who finance investments in commercial buildings such as office and residential buildings, warehouses, hospitals, shopping malls, student housing, hotels and wooded areas. A real estate investment trust fund receives special tax considerations, offers high returns to investors and is listed on the stock exchange. SINCE 1994, there are REITs in Ghana. The Home Finance Company, now HFC Bank, founded the first REIT in Ghana in August 1994. HFC Bank has been the leader in mortgage financing in Ghana since 1993.
To finance its mortgage lending activities, it used various group investments as well as corporate bonds. Collective investment systems, including REITs, are regulated by the Securities and Exchange Commission of Ghana. REITs are professionally managed listed companies that run their business to maximize shareholder value. These companies are optimally committed to the positioning of their real estate in order to attract tenants and generate rental income. They manage their real estate portfolios and purchase and sell assets to cultivate value over long-term real estate cycles. Their efforts advance the overall return for REIT investors, who benefit from a reliable annual dividend distribution and long-term capital appreciation potential. At the end of 2012, the Securities and Exchange Commission put in place rules to make REITs an investment vehicle, thus opening the doors to the first REITs, which will be listed in 2013.  In the United States, REIT is a company that owns income real estate and, in most cases, operates. Some REITs finance real estate. To be stronger, a company must pay at least 90% of its taxable income to shareholders each year in the form of dividends.  Another important difference is that the law requires REITs to distribute 90 percent or more of their income from their real estate assets directly to investors. Because of these operational requirements, REITs offer investors many reasons to invest in real estate through this channel, some of which will be discussed below.
The REITs Act was passed by the U.S. Congress in 1960.  The law should create a real estate investment structure similar to that provided by investment funds for equity investments.  REITs are strong revenue drivers, as REITs generally must pay shareholders at least 90 per cent of their taxable income in the form of dividends, in order to avoid liability for U.S. income tax.  On August 1, 2020, the Securities and Exchange Commission of Sri Lanka (SEC) announced the introduction of REITS as an extension of the current trust code and that the new rules that came into effect on July 31, 2020 will take the form of a gazette notification issued by the SEC.