You know what’s the real Number 1 investment in Malaysia? And by Number 1, I don’t mean the amount of money people have invested. I measure it by this: if you go to any random lecture hall, Starbucks, or office tower in Malaysia and shout out the words: “Hey mofos, I’m gonna invest in <xxx>!!!” how many people will think you’re crazy?
Well, if you shout out the words “Bitcoin” or “Stock Market,” a lot of people will cover their children’s ears and walk away. But this is what happens if you shout out “PROPERTY!!!”:
But property investment has a few problems… like affordability and liquidity. How many people can afford the downpayment for an RM 800k new development? And then the liquidity problem: even if you manage to buy a property at 500k, and the market price in five years is 750k — how quickly/easily can you sell?
Because if you can’t sell or rent easily — then you’re gonna be stuck paying painful loans for a long time…
Thankfully, this is where REITs come in handy. They allow investors to easily invest in the property sector — but without liquidity and affordability issues. (They’re also really good for lazy people like me.)
Think of REITs like unit trusts — but instead of investing in other stuff, they invest into property like shopping malls, office buildings and hotels. The best thing? At least 90% of their profits must be paid back to investors as dividends.
5-7 % per year
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