General S-REITs Discussion Thread

Layers

Layers

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Knic_King said:
The unit is additional property.. i feel that properties is just another form of investment... i own reits and dividend shares too...

Some people just feel that property is safer as you own the property.

But i didnt realise 200k compunded can be so much. Looking at my cpf now...... $_$ if i can live until my retirement age
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Property requires maintenance, furnishings. renting out 30yrs cfm need to bleed from pocket now and then.

Not to mention tenant tat dun pay or cause trouble

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fatfleaz

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Property investment might not be considered fully passive income since there is a need to manage it.
 
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Knic_King

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True. But after 30 years, there maybe capital gain. So far my properties renting with no issue. Keeping my fingers crossed.

Agree that maintenance and furnishing cost will impact the yield.

As one of the poster mentioned, both reits and properties have its pros and con. I feel that properties allows you to leverage, which is one big advantage. But it is less liquid and you must be able to tide through tough times when rental market is hit. so it really depends on individual.

Layers said:
Property requires maintenance, furnishings. renting out 30yrs cfm need to bleed from pocket now and then.

Not to mention tenant tat dun pay or cause trouble

Sent from Sony E6853 using GAGT
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waxqube

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Knic_King said:
True. But after 30 years, there maybe capital gain. So far my properties renting with no issue. Keeping my fingers crossed.

Agree that maintenance and furnishing cost will impact the yield.

As one of the poster mentioned, both reits and properties have its pros and con. I feel that properties allows you to leverage, which is one big advantage. But it is less liquid and you must be able to tide through tough times when rental market is hit. so it really depends on individual.
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Ya but reits' properties will also appreciate in value.

Leverage goes both ways... At least if reits go boom all you lose is your capital (unless you leverage on the stock)
 
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wilhal18

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waxqube said:
Ya but reits' properties will also appreciate in value.

Leverage goes both ways... At least if reits go boom all you lose is your capital (unless you leverage on the stock)
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reits appreciate?? sure??? not necessarily. it all depends. look at that stupid sabana reit. if you bought during IPO, where does it go? yup its been almost 10 years and you lose the capital. **** investment.

even if you invest in good reits like suntec, since ipo, the price appreciation has been modest. around 25%. but if you buy propoerty in 2009 and you will be sitting at almost 100% capital gain. and if you invest in real property in 2004 = sure 100% gain or more.

i guess the real property is geared for people who wants to get capital gain. and also remember, the real property is tangible!! the reits is intangible. you can only see it from your account.

if there is crisis, the real property is more stable. reits will get destroyed.
 
waxqube

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wilhal18 said:
reits appreciate?? sure??? not necessarily. it all depends. look at that stupid sabana reit. if you bought during IPO, where does it go? yup its been almost 10 years and you lose the capital. **** investment.

even if you invest in good reits like suntec, since ipo, the price appreciation has been modest. around 25%. but if you buy propoerty in 2009 and you will be sitting at almost 100% capital gain. and if you invest in real property in 2004 = sure 100% gain or more.

i guess the real property is geared for people who wants to get capital gain. and also remember, the real property is tangible!! the reits is intangible. you can only see it from your account.

if there is crisis, the real property is more stable. reits will get destroyed.
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In 2009? Just pick almost any REIT in 2009 and you look at the capital gains now.

Property is property whether it is part of a REIT or not. You have "bad" properties and "good" properties. Not all properties appreciate the same way and I guess it is up to you to pick a good one.

In a crisis, good REITs can at least raise money from multiple sources. What happens if you lose your income and can't finance your loan anymore?

P.S. I'm not against real property or anything just having a discussion.
 
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fatfleaz

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wilhal18 said:
even if you invest in good reits like suntec, since ipo, the price appreciation has been modest. around 25%. but if you buy propoerty in 2009 and you will be sitting at almost 100% capital gain. and if you invest in real property in 2004 = sure 100% gain or more.

i guess the real property is geared for people who wants to get capital gain. and also remember, the real property is tangible!! the reits is intangible. you can only see it from your account.

if there is crisis, the real property is more stable. reits will get destroyed.
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How about if you factor in dividend payout & capital appreciation?

With REITs, one can diversify and can liquidate easily. I find it very difficult to agree with your point about being "destroyed" in times of crisis.
 
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wilhal18

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waxqube said:
In 2009? Just pick almost any REIT in 2009 and you look at the capital gains now.

Property is property whether it is part of a REIT or not. You have "bad" properties and "good" properties. Not all properties appreciate the same way and I guess it is up to you to pick a good one.

In a crisis, good REITs can at least raise money from multiple sources. What happens if you lose your income and can't finance your loan anymore?

P.S. I'm not against real property or anything just having a discussion.
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bro, i didnt say that reits did not experience capital appreciation from 2009 onwards. ofcourse, it did. BUT It was modest. not too great compared to real asset like property bro. in 2009, you snapped any property in SG, you got 50% increase at least. some even 100%.

regarding bad and good property, i agree 100% with you. no argument there.

if you talk about crisis and then you got no income to pay the loan installment, this is comparing orange to apple. since that means, we are talking about leverage. with real property, you buy by taking loans (leverage), however with reits, we dont leverage right? i understand your point, but its unfair comparison.

in my opinion, the main merit of REITS is LIQUIDITY and less headache. seriously, this is the main thing that draws me to reits. sure you can make more money by real property investment, but are you ready for all the bull*** that comes with it? like downpayment, paying interest , tenant, high fee to enter , etc.

PS: dont worry, i never take your comments as offense. we are having discussion and i am more than happy to learn from you or anyone else here in the forum since i still have a lot to learn.

me personally, for my situation now, i like reits better. but thats because i am broke as hell. hoewver, if i have quite a lot of money , i will be more than happy to forego reits for real property.
 
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wilhal18

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fatfleaz said:
How about if you factor in dividend payout & capital appreciation?

With REITs, one can diversify and can liquidate easily. I find it very difficult to agree with your point about being "destroyed" in times of crisis.
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yes, if i factor in the the dividend, so what??? the real property, you can also rent it out right? isnt it the same? sure the reits will give you more as the rental property is generally around 3% but reits gives about 6-8% depending of which sector you are in.

but for extra 3-5% dividend, the capital appreciation of real property beats reits hands down from 2009.

seriously, i think for any investment, there is always a time for everything. from 2009 onwards, i will say real property edge out the reits. but from now to 2025, is it the case? i am not sure, nobody knows.

why you disagree with my comment of being "destroyed"?? the reits or stocks will absolutely be destroyed if there is crisis.

but real property is still there. you can even stay there if you want to. can you stay in your reits? dont think so.

during the crisis, you want to hold on the real asset. something tangible like gold, house, etc. those stocks etc will be wiped off.

feel free to let me know your thoughts. we are having discussion here. i am happy to hear your opinion
 
Dyhalt

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REITS and property ownership are 2 very different investing tools, in my humble opinion they are not good comparisons to make an argument about.

REITs have the liquidity of stock except its income is generated from rentals of property and have special regulations and tax benefits. In simple terms they have the liquidity in trading and opens up investment opportunity to small investors which was only available to institutional investors in past. Owning REITs does not make you the owner of its property, but the owner(REITs) is obliged to share its rental profit with unit holders after expenses and fees.

Buying property in Singapore, legally you are buying the right to use land space plus construction cost for a fixed period of time (99 years most common). You can transfer the right to use for capital gain (AKA selling) but still subject to all other limitations in property buying.

Now to the main point:
1. Property and REITs are both affected by their own asset valuation cycles. Stock crash is simply the phase in cycle where the bubble pops, it can also happen to property. Property in Japan for the past 30 years is one of the best example to show a property bubble expansion and popping phase, in many places the Japanese property value is still much lower than its peak in 1990. Judging SG REITs & property based only on their performance difference from 2009~2016 can be misleading.

2. You can lose money in both REITs and property due to lack of transparency. Most REITs IPO price is higher than what they are actually worth, just like buying a property at price much higher than common perceived value. No matter what you buy you have to do your homework.

3. Leverage can happen in both property and REITs. REITs borrow and increase its gearing to raise its payout %. Property you can pay a minimum down payment and borrow mostly from bank loans so your rental to down payment ratio can be significantly higher with much higher risk to interest fluctuations.

In a open and fair market everything is priced with their rightful risk and profit, ultimately there is no right or wrong investment, just investment that suits you or not.

Cheers
 
waxqube

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wilhal18 said:
bro, i didnt say that reits did not experience capital appreciation from 2009 onwards. ofcourse, it did. BUT It was modest. not too great compared to real asset like property bro. in 2009, you snapped any property in SG, you got 50% increase at least. some even 100%.

regarding bad and good property, i agree 100% with you. no argument there.

if you talk about crisis and then you got no income to pay the loan installment, this is comparing orange to apple. since that means, we are talking about leverage. with real property, you buy by taking loans (leverage), however with reits, we dont leverage right? i understand your point, but its unfair comparison.

in my opinion, the main merit of REITS is LIQUIDITY and less headache. seriously, this is the main thing that draws me to reits. sure you can make more money by real property investment, but are you ready for all the bull*** that comes with it? like downpayment, paying interest , tenant, high fee to enter , etc.

PS: dont worry, i never take your comments as offense. we are having discussion and i am more than happy to learn from you or anyone else here in the forum since i still have a lot to learn.

me personally, for my situation now, i like reits better. but thats because i am broke as hell. hoewver, if i have quite a lot of money , i will be more than happy to forego reits for real property.
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Let me just cherry pick a bit. I assume we are talking about beginning of 2009. Mapletree Logistics Trust was around 0.4 and is 1.07 now. Ascott Residence Trust was around 0.5 and is 1.14 now. Ascendas was 0.7 and is 1.6 now. (From Yahoo Finance, hopefully they are accurate)

About the leverage, it is a bit apples and oranges I agree. I was talking more about the leverage on the balance sheet. At least if there are any margin calls on the loans and they can't refinance, at least they can raise equity from the market.
 
WindBoi

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i was suppose to write one post on what i find are the benefits of REITs but perhaps i can compare them here briefly.

Properties at this point is a leverage + capital appreciation. there is no passive income or cash flow to say. this is because most properties right now is negative cash on cash yield. the cash flow is used as part of mortgage payment. and you have to top up.

your gain will come from capital appreciation. you can use 3 different returns: 1%, 3% and 5%. Because you leverage 80%, your XIRR return at 1% is 3%, 3% is 9%, 5% is 14%. it is very lucrative, but it is based on capital appreciation. even 0% the XIRR is 2.6%, which is the rental yield you rent at.

however, it is one building and you are concentrating your wealth. doing this way is very speculative. you need to do it well.

REITs are more liquid. you don't own the property but a trust + manager. You earn a total return that is leveraged. the past XIRR can be 14-16% for first reit, maple log, to 8% for keppel REIT. long term i believe is something like 6% dividend yield + 2% gdp/inflation growth. there is diversification and that due to the NPI margin of 70% or net margin of 50%, it means that at worse if 50% is vacant, the REIT breaks even. but because there is no dividend, the share price have to fall. compare to properties it is not so much different. it is just that REIT is so much more liquid that the price will just plunge.

in the worse case scenario you can see there are opportunities similar to property. the worse of them sabana, you can think of what a better manager who are better connected can do to it. what looks jaded can become a good investment. that is what happen for frasers commercial and aims amp.
 
Genosis

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Alwaysb

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Hi, since you have real property, do you still invest in reits?

wilhal18 said:
yes, if i factor in the the dividend, so what??? the real property, you can also rent it out right? isnt it the same? sure the reits will give you more as the rental property is generally around 3% but reits gives about 6-8% depending of which sector you are in.

but for extra 3-5% dividend, the capital appreciation of real property beats reits hands down from 2009.

seriously, i think for any investment, there is always a time for everything. from 2009 onwards, i will say real property edge out the reits. but from now to 2025, is it the case? i am not sure, nobody knows.

why you disagree with my comment of being "destroyed"?? the reits or stocks will absolutely be destroyed if there is crisis.

but real property is still there. you can even stay there if you want to. can you stay in your reits? dont think so.

during the crisis, you want to hold on the real asset. something tangible like gold, house, etc. those stocks etc will be wiped off.

feel free to let me know your thoughts. we are having discussion here. i am happy to hear your opinion
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