Asked by Anonymous

Should you invest in REITs or physical propety?

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  • Jonathan Chia Guangrong
    Jonathan Chia Guangrong, Fund Manager at JCG Fund
    Level 6. Master
    Answered on 27 Feb 2019

    REITs would be a better choice especially if you don't have a large capital base to start off with. Yield wise, depending on the REITs sector and REIT manager, it may also beat rental yield of property.

    Tax consideration is also a point to take note of, as you will be subject to property tax if you own property, not to mention the hefty stamp duties required for multiple properties. Dividends from REITss on the other hand are tax free for individuals.

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  • Leonard Tan
    Leonard Tan
    Level 6. Master
    Answered on 27 Feb 2019

    Nicholes shared a pretty good article with the comparisons.

    I agree fully. the hassle with administrative and legal matters- not to mention cost, make purchasing physical property extremely tedious, much less managing them.

    Moreover, investing in a reit can give you access to commercial and retail property landscape- which is not just sound for diversity purposes, but more promising in sg’s context- given property cooling measures have successfully driven resale and rental property prices down substantially.

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  • Ernest Yeam Wee Leong
    Ernest Yeam Wee Leong
    Level 4. Prodigy
    Answered on 27 Feb 2019

    Invest in REITs and physical property if got enough money

    Otherwise start with REITs first then physical property

    These are two different asset class

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  • Zann Chua
    Zann Chua
    Level 6. Master
    Answered on 27 Feb 2019

    Hello!

    Personally, i would prefer investing in REITs since it is much easier and more convenient as compared to investing in a physical property. It is also much cheaper to invest in REITs since you would not need to have as much cash as compared to investing in an actual physical property. To me, it is also too much of a hassle to ensure that the property is well maintained etc, thus REITs would be a better investment if you were to ask me. Hope this helps!

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  • Nicholes Wong
    Nicholes Wong, Diploma in Business Management at Nanyang Polytechnic
    Level 6. Master
    Answered on 27 Feb 2019

    https://dollarsandsense.sg/investing-property-vs-reits-better/

    Got an article here to explain the differences. But personally i would say REITs are less troublesome compared to physical property because got manager to manage the REITs.

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