Property Investment 101: REIT is also property investment too
Real Estate Investment Trust (REIT) is also property investment too.
Property Investment may be too risky, we may not have the time and it requires effort
Too many people have told me that property investment is too risky. They also have no time to read so many articles in kopiandproperty.com and it just take too much time and effort. They are right. Property investment, if we want to start does require a big capital. Please do not believe to much about no need downpayment etc. That downpayment has to come from somewhere. Usually, it comes from the buyer, somewhere and somehow even if the buyer did not have to fork out that downpayment.
Well, there’s another way. This is through Real Estate Investment Trust (REIT). The people managing these REITs are professionals. Actually, I have not read about REITs suffering huge losses etc. If you have read, do tell me. When we invest into REIT, we do not need huge downpayment. It’s just like buying shares in the stock market.
We do not need lots of time and effort. Just choose the one which is managing the mall or hotel or property which you love. It’s like buying into a super small portion of the mall you love! You can technically claim that I am an owner of this property but I own maybe a few square feet of the whole property. Something like that.
Article in thestar.com.my Malaysian retail real estate investment trusts (REITs) are expected to benefit from stable occupancy rates across key assets, positive rental revisions and improving foot traffic.
According to AmInvestment Bank Research (AmInvest Research), these factors will help retail REITs to continue enjoying healthy growth this year supported by a stable labour market, modestly higher inflation of 2.5% to 3.5% as well as the gradual recovery in tourist arrivals.
Its top picks are Pavilion-REIT (fair value of RM1.62 per unit), IGB-REIT (fair value of RM1.92 per unit) and YTL-REIT (fair value of RM1.11 per unit).
AmInvest Research said, “We see buying opportunities in Malaysian REITs, given widening yield spreads against 10-year MGS yields with appealing distribution yields of 6% to 10%.” Please do read the article in full here: Article in thestar.com.my
Briefly, all the advantages of REITs
#1 – Super affordable to start. We do not need 10% downpayment to buy. We just need to buy as much as we could afford.
#2 – Liquidity. We can buy today, sell today. We can buy today, sell 3 months later. Really up to us. Unlike buying a property which will take many months to complete the buy and another few months to sell.
#3 – Steady dividends. REITs usually declare as much dividend payout as they could unless they need the money for further acquisitions. So, every year, the investment will give returns.
#4 – You ‘OWN’ a commercial property you love to visit. How many of us could say we are owner of a famous and popular mall? Well, we could if we buy the REIT which manages the mall.
#5 – Professional management. I do think the professionals who are managing these REITs are experienced people. Usually with years and years of real estate industry experience too. So, their decision will be better than ours too.
Happy thinking and deciding.
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