Considering REITS in Singapore

Commercial and residential buildings, reflected in water, stand in Singapore, on Wednesday, June 13, 2018. Photographer: Brent Lewin/Bloomberg

To buy a property, you generally need large sums of money, besides also having to consider the ancillary costs, such as the notary’s fee, cadastral and registry taxes. However, some situations like these can be mitigated by taking out a mortgage or by turning to some forms of real estate leasing and rent with redemption formulas.

Purchasing real estate as an investment

It must be noted that even if purchasing a house for yourself can be considered an ‘investment’, in finance, it is considered as a hypothesis in which a return is obtained. In the case of real estate, this can take place under two forms:

The return can be classified as a capital gain that is obtained when the price you pay for the purchase is significantly lower than the selling price. But be careful – in this regard, we must also consider the sum of the costs incurred both at a fiscal level and for maintenance and renovations.

Alternatively, the return can also be seen as a periodic return that is generally represented by rental fees. This is so unless you are investing in real estate investment funds, for which returns are obtained in the form of interest paid periodically and calculated on the basis of the amount of participation that can be boasted.

In both cases, making a profitable investment in a property with little money is extremely challenging. However, this does not mean that it is not possible, since buying a house in its entirety is not the only way to invest in a property with limited funds. There are two options available that you can still invest with little money.

Alternate forms of investments – REITs

The first is to invest in REITs in Singapore. Note that if your goal is to yield without having to worry about maintenance, taxation, management of tenants and / or tenants, the real estate investment could be similar to buying shares. If not, it must be a similar form, where you buy shares of participation. Following this point of view, we can then adopt the following feasible hypotheses.

Real estate crowd funding

Real estate crowd funding, sometimes known as co-investment, refers to genuine crowdfunding, for which those who want to invest must access the platform (following a registration process with specific instructions) and choose an amount to invest in the chosen project. The amount to invest must be between the minimum and maximum amount foreseen for that investment by the platform itself.

The minimum amount can be quite flexible and can range from tens of dollars (with the average being $50) to $1000 per single share, with the choice of various multiples. The returns are as ‘expected’ (indicated in principle with the ROI, which is the ‘expected or estimated return’ of the investment itself). There are no particular requirements other than those that allow for registration and the availability of money for investment.


In terms of the amount of time required, these are hardly long-term investments. In the scenario where the objective is not reached, the investment does not start and you will receive back the invested sums, without having gained or lost anything (no interest is expected during the stock, which can also cover several months) .

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