What do y’all think about building up a REITs portfolio while being a student? I only have ~10k and I’m worried that I won’t be able to generate that much of dividends per annum with just 10k.?

Hi Anon,

I get what you mean! As a student who's invested in REITs myself, I too wonder whether what I'm doing is "correct" or the best.

It's true that with a small capital, the dividends you earn won't be much - assuming a 5% dividend yield across your REITs portfolio, you will be earning $500/year with $10k. Compared to the growth potential for, say, the S&P 500, you could be missing out on higher returns.

Because of this, I've considered selling my REITs to convert them into index ETFs like VOO or CSPX. But I've decided not to because:

1. I believe that with a small capital, the difference in returns that I would be earning between REITs vs S&P 500 wouldn't be very big, especially given that the S&P 500's annual growth _may _be slowed in the current economy,

2. I believe some of the REITs I currently hold have a lot of potential (CICT, MCT) and can possibly buff up my returns,

3. it does provide some form of diversification in the fact that it is ultimately a real estate investment, albeit in the form of equity,

4. my REITs portfolio is currently at a loss since I bought into the majority of them during the bull-ish period of pre-2020, so I'd rather not realise the losses just yet and wait for the market to pick up.

5. REITs is something that I feel very comfortable investing in. When I first started my investing journey, there were a lot of things I didn't know and was skeptical about. Investing in SGX-listed REITs provided me with some comfort when I was first dipping my toes into the water, I guess because it's closer to home. If I didn't start with REITs, I'm not sure when or if I would have gained enough confidence to invest in global markets.

At the end of the day, the best theoretical decision may not be the best decision for you, because investing is different for everyone. I suggest that you do whatever you're comfortable with at the beginning, and take your time to explore.

All the best & happy cny!

Regards,

thefrugalstudent

I am not sure what is your thought process that makes you decide to consider REITs than normal equity / stocks. Since REITs behave (correlated) like normal equity, I guess it is fine even though it is not common.