Frequently Asked Questions
	What is a PUT?
	PUT stands for Property Unit Trust, a collective investment scheme in property which invests in a portfolio of investment grade properties that is held for its rental income and capital appreciation.
	Can anyone invest in PUTs?
	Yes, PUTs represent the ideal way for individuals to invest in property. Investment in PUTs does not require specialised property management expertise and unit holders' interests are further protected by strict regulatory controls. You will need to open an account with a stockbroker to buy PUTs, as they are listed on the JSE Limited.
	How are PUTs managed?
	PUTs are managed by experienced and reputable management companies, responsible both for the day-to-day operation of the properties and also for the investment strategy of the trust. The management companies' affairs are regulated by a Trust Deed, approved by the Registrar of Collective Investment Schemes.
	Why should I invest in PUTs?
	A PUT offers investors the best of both worlds: it is a secure, stable investment with a reasonably predictable future income stream, while also offering the prospect of capital growth. PUTs are unique in that their income stream is substantial and secure, without generally diluting their prospects for capital growth.
	Where do PUTs come from?
	The PUT industry dates back to 1969 when two trusts were established and listed on the JSE because of the need to provide access to investment grade properties for investors who would not normally have access to such investments.
	Why was the PUT sector established?
	The purpose was to encourage investment in property by individuals and pension funds lacking the inclination or expertise to manage freehold property investments themselves.
	What is the minimum monthly payment for an investment in PUTs?
	There is no minimum payment, and you can't purchase PUTs with a monthly debit order - although this can be achieved through investing in any one of a number of unit trusts who invest exclusively in listed property vehicles (predominantly PUTs and PLSs). PUTs are purchased in lump sums, as you would purchase any shares in any other company listed on the JSE Limited.
	How do PUTs differ from equity unit trusts?
	Firstly, PUTs are listed on the JSE Limited and trade on a daily basis at the spot price at that time. Equity units trusts, or collective investment schemes, are not listed at all, but are run on administration platforms of the institutional asset managers. Secondly, PUTs invest solely in investment grade properties, while equity unit trusts are invested in the broader stock market. Equity unit trusts pool investors' money and use that to invest in various sectors of the JSE Limited, while PUTs acquire a portfolio of properties that provide continuing and long term income streams from rentals, which make it a safe, attractive, long-term investment. Rental streams are more predictable and manageable, which leaves PUTs less exposed to daily volatility of the market.
	What is the difference between a property unit trust and a property loan stock company?
	PUTs are highly regulated, tax-efficient investment vehicles listed on the JSE Limited, and are under the auspices of the Financial Services Board (FSB). PLS’s are debenture structures listed on the JSE Limited, but not regulated by the FSB.
	Where will I be able to monitor the performance of PUTs?
	The prices of listed PUTs are quoted on the JSE and are published in the pages of most daily newspapers, under the heading 'Real Estate Investment Trusts'.
	How does tax affect PUT income?
	In terms of the Income Tax Act, and because of the nature of the collective investment scheme, PUTs do not pay tax on the income they earn and all income is distributed to the investor. Distributions are therefore taxed only in the hands of the unit holder. The South African tax regimen deems PUT distributions to be interest and, as such, only receipts that exceed the annual threshold for individuals will be taxed; bearing in mind that individuals over the age of 65 will be taxed on interest earned at levels higher than those under 65.
	How risky is a PUT investment?
	PUTs are unique as an investment vehicle in that their income stream is substantial and secure, without generally diluting the prospects of capital growth. It is the easiest, quickest and safest way to invest in property. PUTs offer high-income returns, which are generally less volatile than equities, thus providing smoother returns from a mixed portfolio.
	How do PUTs rate as security?
	PUTs represent excellent security for investors who wish to raise loans. Also borrowing levels in each of the PUT funds is extremely low when compared internationally, so there is little risk that income will be eroded by high interest payments.
	What role does the Association of Property Unit Trusts play?
	The Association was established in 1984 to look after the interests of PUTs, unit holders and the management companies. Its objectives are to promote the sales of units, communicate with regulatory bodies such as the Registrar of Collective Investment Schemes, and the JSE and evaluate or lobby for proposed legislation, which could affect the industry and unit holders.