Singapore REITs – Investing For Passive Income
Posted On August 6, 2011
Singapore REITs are new and there are only 23 REITs in Singapore as compared to thousands of equity funds in the stock market. REITs investment is one of the ways that you can leverage and make money from your property investment without too much of a headache.
In short, if you would like to invest in properties, especially commercial real estate such as shopping malls or hotels or hospitals, but don’t know how to or do not have enough resources, REIT can be one of your options.
While investing in REITs may not give you the best ROI, it is one of the best vehicle and medium to generating passive income for life, allowing you to never have to worry about money problems.
So, what really is REIT investing ?
The acronym REIT stands for “real estate investment trust,” also called “real estate stock,” for short. It is a kind of investment that is similar to mutual funds, in the sense that it uses the pooled funds of investors to invest in large-scale commercial real estate.
In other words, a REIT investor combines his fund with other investors so that the funds are large enough to invest in bigger and more prestige estates.
There are basically 3 different groups of people in a REIT setup. A REIT manager who oversees the assets of the scheme, The trustee who makes sure the REIT manager performs his job, and the unit holder, who serves as the public stakeholders.
Obviously, the biggest advantage in a Singapore REIT investment is that it is almost hands free and you don’t exactly need to worry about bank loans and tenant issues. Moreover, since REIT is a commercial or public building in most cases, as a share holder, you can visibly see if the business is doing good before deciding to invest in them.