Investment in Real Estate Investment Trusts (REITS) in Canada

[hello_0]

Hi All

I recently came across REITs, which - per my understanding - are equities of companies that own a lot of real estate properties. They pay out monthly dividends based on their income.

From my research it seems that most of these REITs generate their income through rent and capital appreciation. But some of them operate in the mortgage arena and gain their income through interest.

Now I assume that the latter is shady (both sharia-wise and financial-soundness wise) and best avoided. But about the former:

-Is it ok Islamically? Am I missing any caveats here?

-What if its not certain whether a REIT is 100% rent-based? (Say there's a split of 90% to 10% between rent and undisclosed, which could be mortgage-ish). Would it be ok to invest in them? 

Thank you

[Ashvazdanghe]

On 7/29/2024 at 4:12 AM, hello_0 said:

through rent and capital appreciation.

Salam there is no problem about having income through renting which  having undisclosed has no problem which is based on rate of increase in cost  of living but on the other hand operating in the mortgage arena and gaining  income through interest is not allowed.

 

[JannahLM]

Please don't. Property investors are the primary reason why nobody can afford to live anywhere and why Canada has some of the highest per capita homelessness rates in the world. Personally I'm stuck in a highly toxic and even abusive situation as I cannot afford to move out anywhere else.

Edited August 17 by JannahLM

[hello_0]

Really sorry to hear about your situation @JannahLM. Hope you find ease Insha'Allah

I would have thought property investment could help out with the dire shortage in homes. How are property investors responsible for the current state of affairs?

Also, REITs also operate in the retail sector; I assume you are only referring to REITs operating in the residential sector.

Thanks!

[JannahLM]

On 8/23/2024 at 8:23 PM, hello_0 said:

Really sorry to hear about your situation @JannahLM. Hope you find ease Insha'Allah

I would have thought property investment could help out with the dire shortage in homes. How are property investors responsible for the current state of affairs?

Also, REITs also operate in the retail sector; I assume you are only referring to REITs operating in the residential sector.

Thanks!

Sadly property investors don't help the current situation, but only make it worse. This has been an ongoing problem in Canada for awhile now. I'm running out of options. Might have to get in better physical shape and enlist in the military, die for NATO, as they will provide benefits and pay I don't get otherwise.

[Ashvazdanghe]

On 8/25/2024 at 7:05 AM, JannahLM said:

. Might have to get in better physical shape and enlist in the military, die for NATO, as they will provide benefits and pay I don't get otherwise.

Salam for having a better physical shape you don't need to enlist in the military which in similar fashion you must not die in a useless war in favor of non muslims ; which Allah will provide  benefits & pay you through different means which you just make a move with intention of gaining Halal income through deeds in favor of muslims which maybe a little inspiration from Allah & not ignoring it will help you to gain Halal income through doing right deeds even if you initiate any business with your current saving inshaAllah which just initiate something which inshaAllah Allah will bless it . 

[JannahLM]

On 8/26/2024 at 12:09 AM, Ashvazdanghe said:

Salam for having a better physical shape you don't need to enlist in the military which in similar fashion you must not die in a useless war in favor of non muslims ; which Allah will provide  benefits & pay you through different means which you just make a move with intention of gaining Halal income through deeds in favor of muslims which maybe a little inspiration from Allah & not ignoring it will help you to gain Halal income through doing right deeds even if you initiate any business with your current saving inshaAllah which just initiate something which inshaAllah Allah will bless it . 

You make it sound like just anyone can start a business. It's not so simple. Firstly, they'd need to have a marketable skill or product that is in demand (which I don't). Secondly, they'd need a safety net to fall back on if their business endeavours fail. Nearly all successful business owners come from families that are well off. They were able to rely on familial support if their initial attempts at business failed. You see, I don't have that. If I tried to start a business and it failed then I'd be homeless. I have no family, or even friends, to pick me up if I fell. Thirdly, networking is often key to running a successful business. One needs to have social connections to get their name and product known (at least in the early stages), and I don't even have friends to help me with that.

So yes, the military is looking like a more realistic option for me right now. I do not support most of the wars that my country gets involved in, but that's the case for so many others who join the military. The military preys on those who are poor and vulnerable with promises of benefits like education, steady employment, etc. It's the dark reality of the military in most western countries, especially in countries like mine where enlistment numbers are way down.

[Ashvazdanghe]

On 8/30/2024 at 8:41 AM, JannahLM said:

You make it sound like just anyone can start a business. It's not so simple. Firstly, they'd need to have a marketable skill or product that is in demand (which I don't). Secondly, they'd need a safety net to fall back on if their business endeavours fail. Nearly all successful business owners come from families that are well off. They were able to rely on familial support if their initial attempts at business failed. You see, I don't have that. If I tried to start a business and it failed then I'd be homeless. I have no family, or even friends, to pick me up if I fell. Thirdly, networking is often key to running a successful business. One needs to have social connections to get their name and product known (at least in the early stages), and I don't even have friends to help me with that.

Salam i aware of it which in initiating a business so then making it into the successful business is not easy as I have said which in story of successful business people whether men or women you can find too many examples of falling back & bankruptcy even great losing of everything multiple times which they have became successful people after agreat sacrifice & enduring hardship multiple times ; which I'm not such kind of person likewise them although I'm aware of their stories which in story of the succeful people you can find examples which they have not "a marketable skill or product that is in demand" which sometime they have innovated new skill or product that has not been in demand so then they have changes situation in their favor by too much effort & sacrifice which I 'm not such kind too .

 

On 8/30/2024 at 8:41 AM, JannahLM said:

So yes, the military is looking like a more realistic option for me right now. I do not support most of the wars that my country gets involved in, but that's the case for so many others who join the military. The military preys on those who are poor and vulnerable with promises of benefits like education, steady employment, etc. It's the dark reality of the military in most western countries, especially in countries like mine where enlistment numbers are way down.

you are looking for too much easy option due to your too much depression although all militaries  are providing such things but it's not a good payback if you help your military against muslims which you can join to military only if you can found a way to help other muslims in case of facing your military with muslims which it will be a too hard situation . 

[Dreamcatcher]

On 8/31/2024 at 3:07 PM, Ashvazdanghe said:

you are looking for too much easy option due to your too much depression although all militaries  are providing such things but it's not a good payback if you help your military against muslims which you can join to military only if you can found a way to help other muslims in case of facing your military with muslims which it will be a too hard situation . 

Is it justified though to ask someone to not join their own country's military? There certainly are roles that are not combat related that one could join? Perhaps a muslim joining in will make a little difference around them?

If there's a blanket should not join the military (or Government jobs) then what about a successful business that will pay the taxes to the Country's Government that in turn gets spent in military against muslims? Even living and earning in the West becomes a problem then. Heck, one could argue against just about every country on the planet with this line because there are muslims working against muslims too.

[JannahLM]

7 hours ago, Dreamcatcher said:

Is it justified though to ask someone to not join their own country's military? There certainly are roles that are not combat related that one could join? Perhaps a muslim joining in will make a little difference around them?

If there's a blanket should not join the military (or Government jobs) then what about a successful business that will pay the taxes to the Country's Government that in turn gets spent in military against muslims? Even living and earning in the West becomes a problem then. Heck, one could argue against just about every country on the planet with this line because there are muslims working against muslims too.

Yes. Virtually all military forces in the world also have non-combat roles. Lots of people join to go into medicine, science, trades, and other fields.

[Shian e Ali]

On 9/1/2024 at 7:06 PM, JannahLM said:

Yes. Virtually all military forces in the world also have non-combat roles. Lots of people join to go into medicine, science, trades, and other fields.

How about getting into trades? There are companies which help and focus on women getting into trades. That's a much better option than opting for a military that kills your own Muslim brothers and sisters. 

[Diaz]

would like to know what happened to the op, I hope he did the right choice. 

[Jhon Steve]

14 hours ago, Diaz said:

would like to know what happened to the op, I hope he did the right choice. 

Yes, even I want to know this.

[JannahLM]

On 9/12/2024 at 9:09 AM, Shian e Ali said:

How about getting into trades? There are companies which help and focus on women getting into trades. That's a much better option than opting for a military that kills your own Muslim brothers and sisters. 

Going back to school is not so simple. I'm in my 30's and still paying off debt from last time I went back to school because I couldn't get a job.

[Shian e Ali]

2 hours ago, JannahLM said:

Going back to school is not so simple. I'm in my 30's and still paying off debt from last time I went back to school because I couldn't get a job.

The pre-apprenticeship programs are free in some colleges. The government also provides grants around $2,000 per year for those in trades. Or if you can find a sponsor, it'll all be paid for. As for the age factor, I talked around and found people in their 40s starting trades. 

[hello_0]

On 9/12/2024 at 1:52 PM, Diaz said:

would like to know what happened to the op, I hope he did the right choice. 

 

On 9/13/2024 at 4:45 AM, Jhon Steve said:

Yes, even I want to know this.

After taking into account the replies on this forum, pondering further and consulting with family, I reached the conclusion that rent-based REITs are ok (islamically). I couldn't find any clear cut fatwa from Ayatollah Sistani's website, but since stocks are permissible I couldn't see any reason why rent-based REITs shouldn't be

So I have invested in a couple of REITs. However, if someone finds any specific ruling regarding this please share

 

Thank you all once again

[Jhon Steve]

Did you find any specific ruling or guidance regarding rent-based REITs from an Islamic perspective, particularly from Ayatollah Sistani?

[hello_0]

No, I couldn't find any ruling related to rent-based REITs