REIT VS Property
In past, most investors like to invest in property as part of their portfolio. Investor invest property for two things, value appreciation and rental income. Today as investing vehicle is getting more and more, investor can consider about Real Estate Investment Trust (REIT). Investor invest in REIT for two things also, value appreciation and dividend income. Isn’t that quite alike as property investment? Let us do some comparison about property investing and REIT investing.
| Real Estate Investment Trust |
Property |
|
|
Capital |
Low |
High |
|
Way of Investment |
Indirect |
Direct |
|
Income |
Dividend + Appreciation |
Rental + Appreciation |
|
Risk |
Low |
High |
|
Liquidity |
High |
Low |
|
Expenses |
No necessary |
Needed for maintenance |
|
Charges |
Broker Charges |
Lawyer fees, Middle man |
|
Tax |
10% for resident investor |
RPGT |
Comparison of REIT and Property
Obviously, investing in REIT is much more easier and beneficial than property. I am thinking of changing my plan of investing in property to REIT. REIT averagely give 7%-9% of dividend annually. It is better than ASM and EPF and it also can have appreciation which ASM and EPF don’t have.
I have been investing in REIT for more than 5 years when it was then called Property Trust. The return is fantastic. It is safe, stable and flexible than owning physical properties. Please do visit my blog as I do share critical success factors on investing REIT.
[Reply]
Mrcoolku Reply:
April 25th, 2010 at 6:57 pm
Ya, I did read your post for REIT before. Nice intro and info you had. Do you invest in REIT consistently every month or you invest one go?
[Reply]
Lai Seng Choy Reply:
April 28th, 2010 at 8:20 am
Well, I invest only when price is attractive. My rule of thumb, as long as the spread between the market price and respective NAV is more than 10%, I will invest.
[Reply]
Kong Hui Reply:
April 28th, 2010 at 11:27 pm
NAV in listed-REIT may be rather irrelevant. Properties of reach always over-valued.
I look at effective return base on the dividend trace record.
Good to invest on monthly, if you have the budget, or quarterly. Always reinvest the dividend.
Mrcoolku Reply:
May 1st, 2010 at 7:29 am
I think quarterly would be a not bad idea. Thanks! Do you invest in Malaysia Reit also?
sourplum Reply:
April 29th, 2010 at 9:24 am
ouh. they also got NAV and market price eh…
still need to study
Mrcoolku Reply:
May 1st, 2010 at 7:40 am
Ya, hope you can share what you find.