{"id":41961,"date":"2021-07-30T11:01:01","date_gmt":"2021-07-30T03:01:01","guid":{"rendered":"https:\/\/www.99.co\/singapore\/insider\/?p=41961"},"modified":"2022-07-19T19:27:09","modified_gmt":"2022-07-19T11:27:09","slug":"syfe-reit-property-investing-millennials-genz","status":"publish","type":"post","link":"https:\/\/www.99.co\/singapore\/insider\/syfe-reit-property-investing-millennials-genz\/","title":{"rendered":"Empowering Property Investing for Millennials and Gen Z"},"content":{"rendered":"
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Maybe a taste for expensive avocado toast and artisanal barista coffee is to blame, as certain commentators have controversially suggested. Perhaps broader socioeconomic factors are at play. It\u2019s probably a combination of the two.<\/p>\n

But the fact of the matter is, today, many Millennials and Gen Z struggle to save the funds required upfront to buy a property, and may not earn sufficient income to service a loan \u2014 at least, not while living a reasonably enjoyable life (with all the fancy toast and caf\u00e9 lattes that involve).<\/p>\n

As for acquiring a second investment property beyond their primary residence? For a lot of the younger generation, that\u2019s simply impossible. \u201cOwning a private property is a goal that many Singaporeans strive to achieve, but just the cash payment alone for one can easily add up to a six-figure sum,\u201d says Hayden Ang, one of the financial experts at digital wealth manager, Syfe<\/a> \u2014 himself a Millennial, in his late 20s.<\/p>\n

\u201c<\/strong>If you\u2019re buying an $800,000 condo unit as a second property, your minimum cash down payment is already approximately $40,000,\u201d Hayden elaborates. \u201cBut factoring in the stamp duty plus an additional buyer stamp duty (ABSD), you\u2019ll need to have a whopping $114,600 to spare. For those hoping to invest in properties, that can seem a very high entry barrier and a real deterrent. It goes without saying, not everyone has that amount of cash on hand.\u201d<\/p>\n

This is especially true for younger people, who\u2019ve hardly had a chance to start their careers and begin building a savings nest egg. Property investments needn\u2019t necessarily be out of reach, however. With no minimum investment figure, Syfe\u2019s REIT+ portfolio can help anyone enjoy the benefits of property investing \u2014 notably, steady returns and low risk \u2014 with a far smaller outlay of capital than would be required to purchase an entire property.<\/p>\n

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A Real Estate Investment Trust or REIT is a company that owns and often operates properties including hotels, office blocks, shopping malls, industrial estates and hospitals.<\/figcaption><\/figure>\n

Launched in partnership with the Singapore Exchange (SGX), Syfe REIT+ tracks the iEdge S-REIT Leaders Index and is designed to closely replicate its performance. It holds 20 of the largest REITs in Singapore, including renowned names such as Mapletree Commercial Trust (MCT), CapitaLand Integrated Commercial Trust (CICT) and Ascendas Real Estate Investment Trust (AREIT).<\/p>\n

These REITs collectively own and manage properties such as VivoCity, Bugis Junction, and Changi Business Park. As a Syfe REIT+ investor, this means you too get to own a small part of these real estate assets.<\/p>\n

\u201cBy investing in REITs, you can still enjoy the benefits of passive income without the huge upfront costs and high entry barrier that comes with buying investment properties,\u201d Hayden explains. \u201cSyfe offers you the freedom and flexibility to invest however much you want based on your goals and financial situation. You can start from as little as $100 or as much as $100,000 and beyond, but still access the same portfolio of high quality REITs.\u201d<\/p>\n

For those unfamiliar with the term, a Real Estate Investment Trust or REIT is a company that owns and often operates large properties including hotels, office blocks, shopping malls, industrial estates and hospitals, deriving income from sources such as rent.<\/p>\n

Putting money into a REIT allows the investor to diversify across numerous properties, rather than privately buying and concentrating their investment in just one.<\/p>\n

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\u201cREITs have been tried and tested across time and proven to be an investment option with good passive income and capital appreciation opportunities,\u201d says Hayden Ang of Syfe.<\/figcaption><\/figure>\n

Even if your ultimate goal is to own property of your own, the sort of proposition Syfe<\/a> offers could provide a way to get there sooner. \u201cWhile you are saving up for your private property investment, consider investing in Syfe\u2019s REIT+,\u201d Hayden suggests. Although these numbers cannot be considered any guarantee of the size of future returns, Syfe\u2019s REIT+ has yielded average annual returns of 8.7% p.a over the last eight years. In 2020, the dividend yield was 4.5% and this year, the yield is estimated to grow to 5.1%.<\/p>\n

Taking up an opportunity like this, rather than leaving your money in a low-interest savings account, could help you grow the savings you need for a property much faster.<\/p>\n

But what about the wild ROI we keep hearing about from cryptocurrencies and so-called \u2018meme stocks\u2019? Many Millennials and Gen Z might ask, \u2018Why not invest in those?\u2019 \u201cHowever fun and exciting they may be, these types of things shouldn\u2019t form the bulk of your portfolio as they are highly speculative,\u201d Hayden says. \u201cREITs, on the other hand, have been tried and tested across time and proven to be an investment option with good passive income and capital appreciation opportunities.\u201d<\/p>\n

You can\u2019t just look at returns \u2014 you need to think about risk-adjusted<\/em> returns, Hayden counsels. Another important consideration is the ease of access to your money, should you need it in a hurry. With no lock-in period, Syfe<\/a> allows you to withdraw your investment when necessary, without a penalty. When you buy an investment property, it\u2019s more difficult to liquidate the asset.<\/p>\n

\u201cYou never know when life may throw a curveball at you, so being able to access your funds when you need them is a benefit,\u201d Hayden says. \u201cYou don\u2019t want to be in a situation where you have to sell a property at an unfavourable price just so you can close the sale quickly or worse still, go on for months seeking a buyer for your property in the midst of an emergency,\u201d Hayden points out.<\/p>\n

Another advantage to investing in a REIT portfolio is in expanding your property investment know-how. \u201cIt can provide real estate exposure beyond a private property investment, broadening your knowledge and experience in different areas of real estate investments with a very low entry barrier,\u201d Hayden says. \u201cFrom that point onwards, you\u2019ll be better equipped to make decisions on your real estate investments by weighing the pros and cons, with the benefit of wider experience.\u201d<\/p>\n