What Are The Ways To Invest In Properties Without Buying Actual Properties?

November 12, 2018
ST Property

Property investment in Singapore is pretty common for Singaporeans and they would love to afford invest in properties to build their wealth. Singapore’s land is scarce and when there’s scarcity, there is demand. It is a great investment choice for some of the richest people in Singapore and it is still the top investment choice in Singapore. There are many online property platform in Singapore with thousands of property listings like ST Property, PropertyGuru and others platform that you can easily hunt for properties. But, we all know that property is requires a hefty price to commit and being one of the most expensive places in the world to own property and it will be challenging to invest without deep pockets. Luckily, there are ways to invest without going through the traditional method of buying a physical property. Here are few alternatives for investors who are looking to invest in the lucrative property market. 

Real estate investment trust (REIT)

REIT is a structure where investors can buy shares from companies that own or manage portfolio of income-producing properties. It is popular among investors looking to earn some yields because there are regular dividend income. There are couples of benefits investing in REITs - liquid investment tool, low entry barrier where you don’t need huge sum of capital and you have the options to choose a real estate type like residential or hospitality. Though what seems like the most accessible way to invest in real estate with lesser upfront cost and almost zero management but there’s risk that is determined by macro and micro in nature like the political risk, interest rate hike or the market situation. 

Property stocks

One of the easiest and most directly method to invest in real estate market without buying any property. Companies that owns number of properties that either lease out or sell out are the property counters and these property counters may have diversified into other business that may affect the overall stock’s valuation. The difference between property stocks and REITs is that you can pay at least 90% of their net income after tax as dividend. But then again it is up to the management of property counters to pay out dividends. Although REITs are tax-exempt but it is up to management fees that is needed to be deducted from their yields before the dividend distributions.

Property Exchange - traded Fund (ETF)

Exchange - traded fund (ETF) is a type of fund that pulls the money from many investors to own an underlying asset and divides the ownership of these assets into shares. It may seems like complex but ETF can trade like listed stock and you can buy and sell easily. Recently, Singapore Exchange (SGX) announced that they will offer new REIT ETF in the later part of year 2016. Now it has launched an index that tracks a basket of 30 REITS across the Asia Pacific region. The index is based on REITs from various countries that you get to diversify your investment risks and also capture the returns from other countries that have higher yield properties. 

Real estate crowd funding

Crowd funding has been a great enabler for most startups or creators over the past few years and it is finally in Singapore’s real estate. Although it is still in it’s infant stage with many platforms that offers investors how it works. Here’s how it works; by collecting small amounts of money from individuals using online platform. After the money has been pooled enough, it can be used to fund developing real estate projects. However, it depends on the project as investors can look towards earning the high-interest rates between 6 to 20% on the amount for crowd funding (normally between $10,000 to $50,000). The key attractive feature is the promise for high-interest rate returns, considering how low the local banks offering you to deposit your money in savings account. But, it could come with high risks where most developers in crowd funding are those boutique developers with higher chances of failure. The fear is that project may not be complete on time or the project might need more funds. There have been many successful projects through the crowd funding platforms in Singapore and it doesn’t guarantee success all the theme, there are some cases where similar schemes have gone sour. 

There are variety of ways that require lesser capitals, shorter investment period and liquid market but we would advise you to do couple more research before starting to pour your money into the investments. 

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38 comments

  1. Thank for sharing about this. I am so lack of knowledge in this investment thing. Such an eye opener to me.

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  2. wow talk about property, is good if have extra money can consider it. BUt now alot to think of also as kids tuition fee not cheap here, about invest property need to think later.

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    1. True that but we can always invest in properties without having one

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  3. wow informative nya info ni! thank you sebab share berguna untuk masa depan ni

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  4. Great ideas and good sharing. Most of us do not have the capital to invest in something big but your ideas are the right way to invest hehehe

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    1. True right. We want to make property investment but we can afford one. best to try this

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  5. great when talk about investment.. time to make more money.. now i learn new ways to invest.. thanks to ur post..

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  6. Bab bab investment in property banyak kena belajar dan faham betul betul. Salah langkah kita rugi. Tapi perkongsian artikel ni sangat bagus.

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    1. Betul tu. Tersilap langkah memang teruk jadinya

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  7. Such a nice sharing and ideas of ways to invest in property, good for those whom into these kind of thing or looking for some guidance regarding this matter. I’m not really into properties investment but yeah this is good to share.

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    1. Thank you so much. Hope this can help those who seek for this info

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  8. Perkongsian yang bagus untuk mereka yang ingin membuat pelaburan. Banyak info :)

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  9. Kalau modal banyak rasa boleh je invest. Buat masa ni kumpul aset je. Ntk masa depan. Simpanan pon kena ada. Yang penting ada bekalan untuk future

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  10. Thanks for sharing. Memang kena ada ilmu sebelum membuat perlaburan dalam bidang properties ni.

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    1. Memang kena ada ilmu. Silap langkah, rugi

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  11. REIT & ETF memang feveret ramai trader yang minat dengan property. Utk long term, memang berpotensi membuahkan hasil yang best. Tp tu la, kena menunggu gak masa utk buat profit..

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    1. Ramai yang tak sabar nak tunggu profit sebenarnya

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  12. Why these tips come out after we've bought a house hehehehe but this is great for the young people who want to invest and look for a home that fits their budget....

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    1. Hahah that's okay maha. Next time remember this when you going to buy another property

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  13. thanks for the sharing, i memang not so good in property tapi teringini nak miliki property banyak, tapi susah sebenarnya nak handle kena bijak .. kalau tak bijak boleh hilang ongkos.. cuma property dekat malaysia ni terlampau mahal no wonder foreigner je mampu beli hahaaa

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    1. Hahahha kannn. Geram tengok property mahal mahal ni. Orang malaysia mana lah mampu sangat nak beli mahal2

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  14. good sharing...mmg sekarang orang sibuk nak buat investment dlm hartanah. tapi kena cari ilmu secukupnya untuk elak kerugian. harga hartanah sekarang pun makin mahal

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    1. Pening tenogk harga hartanah makin mahal sekarang kan

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  15. Tak paham sangt. Puanya lah baca sebijik2 nak pahamkan kalau bab property or investment ni.Kalau ada fund mmg bagus beli property utk dapat pulangan.

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    1. Pasal property ni kalau tak minat sangat memang susah nak faham. Nanti dah datang minat tu, memang laju je fahamkan semua

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  16. I x tahu sangat tentang pelaburan. Tapi it’s good kalau dapat info macam ni so kita akan lebih peka tentang hartanah

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    1. Hartanah ni kalau tak minat memang susah nak faham tapi bagus untuk kite tau sedikit sebnayak

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  17. Wawa tak berapa mahir bab investment ni.. Tapi husband wawa suka tau pasal pelaburan.. Ini kne hadamkan betul2 baru boleh paham tkut salah paham jadi lain pula kan. Tp cara pelaburan ni ada yg bagusnya juga..

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    1. Say apu kurang mahir tapi kene tahu sikit sebanyak juga untuk masa depan

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  18. Emi menang failed bab property ni. tak reti langsung. memang nak kena belajar pun sedikit sebanyak.

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    1. Tak pe emi, kite belajar sama sama sikitsikit. At least ada ilmu sikit pun dah ok

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  19. Thanks for sharing. Now I understand in detail actually what is crowd funding.

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