Analyzing REITs: Are they worth it? - Marvin Germo

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Analyzing REITs: Are they worth it?

By: Marvin Germo | April 9, 2021

REITs have recently entered the Philippines. However, for those who have ventured into the international market, REITs are not novel. REITs are technically stocks but the company behind them is exclusively for real estate. Basically, REITs are stocks of real estate developers. If you invest in it, it’s like you are buying your own property. However, you have to trade REITs and you can’t own a property when you buy them. What you are buying are stocks, not properties. So, are they still worth it? Are REITs better than properties? Let me answer this for you.

Trends in the market

REITs are worth it, no doubt about that. Since they are stocks owned by real property companies and developers, they are more likely to be stable than other kinds of stocks. In case you don’t see any significant increase in stocks for a short period of time, that might be because of the slow but sure growth of the real estate company. Remember that the real estate industry is stable and when it grows, it grows slowly but surely. Your REITs will depend on the trends of the market. It’s going to be worth it if you think investing in stocks is worth it.

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Real estate and stocks

Who wouldn’t want to invest in real estate? Almost all people want to have their own properties. Young professionals are rushing to have their own house and lot, which is a great goal to start with. I can say REITs are worth it because they are a combination of real estate and stocks. If you are going to invest in REITs, it’s like you gave property and stocks at the same time. The only difference is that you don’t have an actual property but you have the equity on certain properties owned by the real estate companies.

Cheaper than properties

REITs are obviously cheaper than real properties. With as low as 5,000 pesos, you can already have your stocks of real estate companies in the Philippines or outside the country. If you are investing on a budget, REITs are more favorable. You don’t have to spend millions or billions to be a part of the real estate industry now. You can start with 5,000 pesos and gradually increase your investments as time passes by. REITs are great for budget investors. Remember to use your money wisely and don’t push your investment if you are going to get a loan for it. It’s not a good strategy to put borrowed money in investments you never know when will earn.

REITs are worth it, definitely. But, always be guided. If you can’t invest for now yet, don’t force yourself. If you don’t have money to put into REITs, wait for the right time until you have enough money to put into it. Use only your savings when investing. Regardless of the type, whether it’s stocks, crypto, or REITs, you should only invest what you afford to lose. Don’t force if it’s not doable.

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