singapore property

Top 4 Ways for Property Investment in Singapore

For most ordinary folks that aren’t ministers, heart surgeons, CEOs, or investment bankers, there aren’t many ways to get rich. One is to win the lottery, and the second one is to invest in Singapore property and wait for its value to skyrocket. However, like most things in life, this is no simple thing. If it was, many people would be loaded with money.

There are several ways to invest in property in Singapore. The most obvious is to buy the physical property and wait for its value to grow. Simply buy it and pray its value skyrocket. In the meantime, you can live in it, rent it, or just let it be until its value goes up. If you want to try a different approach, here are the alternatives.

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REITs

REITs stand for real estate investment trusts, which are a type of shares that belong to companies that manage or own a portfolio of income-generating real estates. They are traded the same as shares and are very popular because they provide regular income.

Buying REITs offers an unprecedented level of flexibility. Some of the many advantages are that it allows you to buy bite-sized chunks, less capital compared to buying property, and you buy only from a sub-sector (hospitality or residential real estate sector).

Property Stocks

Aside from actual buying, investing in property stocks is pretty straightforward and easy. To that end, you need companies that are known as property counters. They manage plenty of properties that they either lease or sell to make a profit.

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The main difference between property stocks and REITs is that it is obligatory for REITs to pay out a minimum of 90% of the total net income after tax as a dividend. Unlike property stocks, REITs are tax-exempt.

Property-exchange traded fund

ETF is a fund that pulls money from numerous investors to possess an underlying asset and divide the ownership into shares. The Singapore Exchange offers REIT ETF to anyone willing to invest. That’s a pretty smart way to get into the real estate market and toggle along with the big players.

Real estate crowdfunding

Crowdfunding has done miracles for start-ups and social causes. However, at the same time, it hasn’t made its mark on the real estate industry. In Singapore, crowdfunding in real-estate is still in infancy as there are only a few platforms that support it.

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Real-estate crowdfunding works by gathering small contributions from individuals through an online platform. After the desired amount is gathered, the project gets developed. In most cases, investors can expect interest rates that go from six to twenty percent. The interest amount percentage depends on the type of project.

Buying property isn’t the only way to invest in real estate in Singapore. There is a variety of ways, and the best ones are mentioned above. Of course, that doesn’t mean they are risk-free. Value of real estate is not determined by the way you or anyone else invested but from other factors. But, that’s entirely another subject and not the topic of this overview.

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