02 Dec 2019

Become a real-estate business owner via REIT

One of the best investment vehicles with a high return is undoubtedly real-estate, mainly because there is limited space in this world while demand for land increases based on basic economic fundamentals.

This, of course, means the value of land will increase over time, especially for areas around the BTS, MRT or the Central Business District (CBD) where property values sore higher than any other locations, making real-estate investments extremely attractive. 

If we talk about real-estate business groups, especially in golden areas that receive great interest, they are obviously very expensive to invest in. One plot of land could be worth hundreds of millions of baht to billions of baht, which makes investment capital a limited factor for individual investors. In addition, the expertise required to invest in real-estate is tremendously complicated like knowledge about laws and regulations that could only come through direct experience.  

For individual investors who are interested in real-estate investments, especially in areas of high demand, it isn’t necessarily impossible. One way you could take advantage of real-estate investments is to invest in “Real-Estate Investment Trusts” (REITs). 

REITs doesn’t require a large investment capital, with minimum investments as low as thousands of Thai baht. REIT investments allow an individual investor to invest in high quality real-estate development projects and there are many to choose from including office buildings, airports, hotels, warehouses, convention centers, etc. If you are interested in a particular real-estate sector, you can choose to focus on investing in those sectors through REITs. 

Apart from that, investing in REITs also reduces the need for experience as REITs are managed by professionals both in terms of finding tenants, maintaining assets, as well as diversifying investments abroad. 

Another benefit of REIT investments is “liquidity”, which is a major limitation for real-estate investors. When we invest in real-estate, it is often difficult to liquidate or sell off for cash. It is often a difficult and slow process starting from finding buyers, price negotiations, title deeds transfers, and expensive costs when compared to other investments vehicles. However, REITs allows for daily trades and can be sold in units as you desire. Transaction fees are quite low compared to individual property investments.