Property – The Obvious Choice?
So you have saved some money for investment. You have read or heard how important it is to have passive income. You have also been warned of the dangers of inflation eating into your hard earned cash. Since Singapore is a small country limited in land, the economics of scarce resource suggests you want to have exposure to Singapore real property, or property for short.
Investing in property has been the Asian investor’s mantra for generations. Perhaps you already own the property you stay in. Or maybe you are saving to own your own property but would like in the meantime, to have property exposure with those savings. As an observation, the Chinese and Indians, and Asians in general simply adore property and plough more than half of their savings into property, typically residential properties.
If you are fortunate enough to have inherited wealth in Singapore, the chances are high that most of that wealth was in the form of property or related to property. Since property in Singapore has yielded rich returns over the generations, you have decided to invest a substantial portion of your savings in property and property related investments in Singapore.
Singapore is unique. It imposes no capital gains tax on properties and stocks. It has a stable regime, a stable currency, strong economic growth, low interest rate, a highly developed legal system and a highly competitive economic environment. It does not suffer earthquakes, tsunamis or typhoons.
Singapore is a decent place to live, raise children, do business or shop. With all these advantages and infrastructure in place, Singapore today ranks amongst the top 10 countries in the world as the most desirable place for property investments.
Investors worldwide especially from the surrounding countries have for a long time attested to this by storing their money in Singapore property.
So if you are sold to the idea that you want property exposure in Singapore, how do you go about it? For investors with a substantial sum of money to invest and access to loans, there are a wide array of choices. For the average investor, the choice often boils down to buying a condominium or public housing (HDB) or perhaps a second apartment.
I want to introduce something different to you — the Singapore Real Estate Investment Trust (“REIT”). This is a form of investment which is akin to acquiring a stock but with risks and rewards that bear close resemblance to owning a property. REITs are attractive as they provide most of all the advantages of real estate without the accompanying disadvantages which I will share about more in my coming posts.Earning Disclaimer
“Please note that the material here is provided to you for general information and illustrative purposes only, or as descriptive case studies on how our value-investing principles may be applied. It is not intended to be and should not be construed as any form of general or specific financial advice. For the avoidance of doubt, we do not recommend or provide opinions on how or what you should or should not be investing in, and you should always do your own research and independent assessment before making any investment decisions, taking into account your own specific circumstances. If you require any financial advice on investments or any other financial matters, please consult the relevant professional financial advisers.”