REITs or Real Estate Investment Trusts are investment vehicles that invest in real estate.
They are similar to mutual funds, except they are traded publicly on stock exchanges.
REITs are considered to be a good way to diversify your portfolio because they offer exposure to real estate without having to deal directly with property ownership.
Today, we’re sharing with you how you can buy REITs in Singapore.
Step 1: Look for REITs that you might be interested in
The first step is finding a REIT that interests you. There are many different types of REITs, and each has its own unique benefits.
REITs or REIT ETFs
A REIT will usually focus on one type of property such as apartments, office buildings, shopping centres, hotels, etc.
They might also focus on various industries such as healthcare, retail, and commercial.
You should look at all the available REITs before deciding which ones you want to invest in.
There are 2 main ways to invest in REITs: Real Estate Investment Trusts (REIT) and Real Estate Exchange Traded Funds (REIT ETFs).
Simply put, a REIT invests in various properties, usually in a specific industry or property type.
REIT ETFs on the other hand hold various REITs in different industries and property types.
There are many REITs out there so it’s important to do your research.
Read more:
Step 2: Do more research on the REITs
Some of the things you need to consider when choosing a REIT include:
1. What kind of properties does the REIT own? Do they specialise in certain kinds of properties? If so, what kinds? How much of their portfolio is made up of these specific properties? Are they diversified across different types of properties?
2. What is the dividend yield of the REIT? This tells you how much money you’ll receive every year after paying taxes. It’s important because if you’re going to be investing in this particular REIT for years, you don’t want to miss out on any dividends. You could always reinvest those dividends back into more shares of the REIT.
3. Find out about the history of the REIT. Have they been around for a long time? If so, how long? Did they experience any major problems with their business? How is each of their properties performing? These are just a few questions to ask yourself.
4. Check out the competition. Many people compare REITs against other companies like banks, insurance companies, and even mutual funds. When doing so, make sure you know exactly what you’re comparing them to. This is because these other options are known to pay dividends well also and you don’t want to be missing out on opportunity costs.
5. Ask friends and family members for recommendations. Everyone knows someone who invested in a REIT and now makes good money on it. Don’t forget to take advantage of this!
6. Read reviews online. Reviews are very helpful when trying to decide whether or not to invest in something. Make sure you read multiple reviews and see what others think about the REIT.
7. Finally, check out their website. Most websites will give you detailed information about the REIT they offer.
Step 3: Open an online brokerage account
Once you’ve decided which REIT you’d like to invest in, open an online brokerage account.
This is where you can actually purchase shares of the REIT you have chosen.
Make sure to select a trading platform that offers REITs and in the exchange the REIT is listed in.
Based on our research, moomoo offers REITs in the Singapore market and has the lowest fees.
But you can choose the best online brokerage account for yourself.
Once you’ve signed up and completed KYC, you’ll then be able to start buying shares of the REIT directly from the site.
Step 4: Top-up your brokerage account
After opening your brokerage account, top up your account with some cash.
You can fund your broker account in a variety of ways, so you can select the method that is most convenient for you.
Usually, transferring money directly from your bank account to your broker’s account is the quickest way to do this. Other ways would include PayNow, FAST, or GIRO.
This can take anywhere between an hour and a few days, depending on your bank and the broker.
Step 5: Buy shares of the REIT
Now that you have opened an online brokerage account, it’s time to buy some shares of the REIT that interests you!
Simply just search for the stock code on the platform, select how much you’re looking to buy, and place the order!
But before you buy the REIT, you’ll need to understand the differences between the order types.
Limit Orders
A limit order is a type of order where you set a price at which you would like to buy or sell your shares.
If the share price reaches your pre-set limit price, the order will automatically execute.
This is great if you’re looking to buy only at a specific price.
Market Order
A market order is one where you simply state how many shares you wish to buy or sell. This will execute immediately based on the market price, which fluctuates.
The risk of a market order is that you’ll incur a spread which means you may end up paying more than the actual share price.
Step 6: Check that the REIT is in your account
Once you’ve placed the order, wait for the order to be filled by the broker.
Once the order has been executed, you should receive an email notification, SMS, or push notification.
Other methods to check would be to look for the “Position” symbol on the stock buy page or even in your wallet in the trading account.
Step 7: Profit!
That’s all there is to it! You’ve successfully bought shares of the REIT and now you can sit back and watch as the value of your investment grows over time.
Conclusion
We’ve provided you with information on how to buy REITs and REIT ETFs – we hope that you found this article helpful!
Remember though, investing in real estate isn’t for everyone, so make sure to do your own due diligence before purchasing any.
Frequently Asked Questions
How do I receive dividends from my REITs?
You can receive dividends from REITs in 3 ways:
They can be deposited into your bank account, sent by check, or placed in your trading account.
Direct Deposit
Deposits are offered by some brokers. As the broker handles these details, you don’t need to worry about sending yourself checks.
Cheque
This option is more common among retail investors. The dividend checks will be mailed to you if you choose this method.
In your trading account
You can receive dividends in your trading account if your broker offers this. See if the amount has been credited to your account wallet.
Is REIT a good investment in Singapore?
Yes! REITs are a great investment option in Singapore because they offer investors exposure to property without having to worry about maintenance costs.
They also provide dividend income through rental yields that many Singaporeans love. Furthermore, as the economy recovers from the pandemic, you can expect REITs to perform well.
Can I buy 1 share of REIT in Singapore?
You cannot buy 1 share of REIT in Singapore as the minimum lot is 100. However, you can buy 1 share of REIT if it’s listed in US exchanges.
Which is the best REIT in Singapore?
The best REITs are listed in our article here: https://dollarbureau.com/blog/best-reits-singapore/
Can I buy REITs without a broker?
You can buy REITs without a broker through a financial advisor or Syfe’s REIT portfolio.
Financial advisors will help you invest in REITs through iFAST or investment-linked policies via unit trusts.
