In the real estate investments sector in Singapore, investments in the hotel sector are considered the most profitable option due to the rapid rise of prices in the hotel sector. Investors who are not afraid of increased risks should pay attention to the possibility of acquiring housing in developing countries. Due to the current low prices, this type of investment can be a very profitable way to preserve capital.
Investing in Mutual Funds
Today, real estate investment funds are very popular all over the world. In Singapore, they operate in a closed format. The essence of their operation lies in the accumulation of depositors’ funds and their further development in the acquisition of participation rights in the current construction of multi-storey structures. It should be noted that such an investment can only be made at the stage where a building permit is issued.
In this case, we invest, not assuming the position of ‘partners’ or something similar, but by taking the position of real lenders. However, we only finance by buying shares and we can diversify our investment between different projects.
Access is always granted through one of the platforms that provide this type of solution. One must then register and choose the projects to be financed by looking first at the ‘promised’ returns. The choice must always be made consciously, after taking the promised returns as well as other factors into consideration. After all, in these platforms, the principle that higher rates come with greater risk applies.
In most cases, the repayment times of the entire loan can be long, but the possibility to liquidate the shares or part of them through a secondary market in which they can be exchanged or even sold is often offered, provided that you find an interested counterpart. Also, in this case, the minimum investment depends on the platform’s policy and the type of project chosen, although there may be situations in which you can start even with a few tens of dollars per share.
Classic Real Estate with Closed-end Funds
The traditional type of investment is actually investments with closed-end real estate funds which, until the appearance of the two previous alternatives, was initially the only type. As you can understand, however, since these are closed-end funds, they have strict regulations (also with regard to accessibility requirements) and, above all, they do not allow for invested capital for long periods.
Softening the Situation
To soften the situation, one can turn to mixed funds (which invests a part in real estate) or ETFs on listed companies that manage Real Estate funds. In this case, among other things, there are no applied costs that are applied pro rata (or on the basis of the shares that are held) mainly in the form of management costs or commissions.
Today, it is therefore possible to invest in a property even if you have little money, even being able to choose between various possibilities. But it is even more important to have clear ideas about the goal you intend to achieve with the budget amount that can be allocated to this type of investment. When it comes to investments, there will be expected and uncertain returns for which the invested capital, even if reduced in amount, is at risk.
You can find out more in this Singapore investment blog at https://www.realvantage.co/insights/guide-to-investments-in-singapore/, where they talk about the different investment vehicles and their pros and cons.