Real Estate Investment Made Affordable

What comes first into your mind when you think of buying a piece of real property such as a vacant lot or a house or a condominium? One would say that It’s way too expensive and unaffordable, so most people think that investing in real estate is hard to achieve. Purchasing a real property entails a huge amount of capital and there are several underlying costs associated with its maintenance and property management costs. For starters, purchasing a real property for purposes of renting this out for a profit may be a challenge. To add, the rental income is also variable, meaning it is not guaranteed that the unit or house is occupied all the time.

For first time investors, a cheaper alternative investment is already available in the market. These are Real Estate Investment Trusts (REITs). REITs are companies that own or operate properties across a wide range of sectors such as retail, energy, commercial or office buildings. These investments allow you to earn income from real estate without having to buy, manage, or finance properties by yourselves. In the Philippines, we have eight REIT companies. Based on the current market prices, although the yield or dividend payout for REIT is slightly lower, earning on average between 5% - 8% annually as compared to renting out condominium units which earns about 8%-10% annually, this is already a good way to start your real estate investments.

Advantages of investing in REITs:

1. No need for large capital.
2. Real estate professionals handle the property management.
3. Dividend payouts are regular.
4. Company information and financial performance are all disclosed in the Philippine Stock Exchange (PSE) and this is available to the public.
5. Potential capital appreciation.

For beginners in real estate investment with no experience in the real estate industry, you may want to explore this alternative and during this period, learn the basic principles of real estate investments so when the right time comes that you are ready to purchase your own real property, you are equipped with the knowledge that can help you with your investment decisions. Practice discipline and be diligent in your investments for nothing is impossible through hard work, dedication, and perseverance. When you are ready to purchase your first real estate investment, you may approach a broker of your preference or feel free to reach out to REALS Corporation for assistance.

Author: Angie Wee