4 Reasons Why You Should Invest In REITs and Not Residential Property

Updated: Oct 17

Let’s talk about REITs and 4 reasons why it is a better instrument as opposed to investing in a second residential property here in Singapore.

For those who are not familiar with REITs, they are companies that own or finance income-producing real estate across a range of property sectors. By investing in a REIT, we can gain broad exposure to the physical properties that the REITs own.

1. High Liquidity

As compared to investing in physical properties, investing in REITs will be more advantageous and preferred as firstly, REITs investors retain a high degree of liquidity as we can always sell off our investment units as and when necessary. This is not possible if you own a physical property as the process of selling that property itself might take months (and also a lot more fees/costs).

2. Low Maintenance

Secondly, as REITs are managed by property managers, the amount of time and resources required to maintain the investment is low unlike that of a physical property where the property owner will have to find the tenant and maintain the property himself/herself.

3. Low Capital Requirement

Thirdly, the capital that is necessary to participate in a single REIT or REIT index is low (usually $1,000). This allows you to participate in multiple REITs thereby allowing you to achieve maximum diversification effect without having to fork out a massive amount of capital unlike that of a physical property which will result in a high degree of concentration risk as you are fully reliant on the performance of only your second property.

4. High Levels of Diversification

Lastly, investing in REITs will provide you with better underlying exposure that is more corporate driven such as warehouse, healthcare, retail, industrial, etc. which have a better structural growth trend in the next 25 to 30 years as opposed to a second residential property which will be facing strong headwinds in the future that may severely detrimental to its long-term performances.

If you would like to read my analyst report on Singapore Listed REITs, you can find them on my telegram channel:

*Join the channel → click on the channel name → under files → download the report you want!

If you would like to learn about REIT investing, you can find my entire methodology in my eBook: Retire With REITs here:

If you are looking for personalized financial advice, I offer a 1-to-1, fee-only consultation where you will receive personalized strategies to design, implement and manage a profitable REIT portfolio. You can find out more about it here: