Imagine this—you invested your hard earned money and saved up your whole life for a condominium unit. You thought these investments would become a good retirement plan for you—only for it to not become a hit in the neighborhood the moment the unit gets finished and you end up not even getting back what you invested in the first place. You end up selling it to another person for a cheaper price. Tragic, right?
Change that narrative with REITs, or Real estate investment trusts.
In Thailand’s current landscape, real estate investment trusts (REITs) have been popular among investors and professionals seeking to invest their income in a passive investment. It continuously gains traction as an investment option for both Thai locals and foreigners in the country to make use of and take advantage of the growing popularity of the real estate market and the strengthening tourism of the country.
Real estate investment trusts (REITs) function by offering a way for people to invest in real estate properties without directly buying the property itself. Real estate investment trusts allow investors to buy shares from a collection of real estate investment assets (or a real estate portfolio) that is receiving income from different sources and properties, such as hotels, condominium units, commercial buildings, apartments, subdivision homes, and more. This strategy gives opportunity for the investors to buy a share but not the property itself, meaning they can earn from it without directly managing all the necessary documents and processes to make it sell. The developer of the properties is still the one who’s going to be managing the paperworks, finances, and legal processes in leasing the property to customers. It is a perfect representation of a passive income!
Now, let us change the narrative from the beginning of this article. Let’s say you buy a small share of a real estate business that includes hotels and condominium units. You buy a share, but you don’t buy the entire property itself. After arranging and confirming your shares with the property developer, you go on with your life, worrying about nothing, but receiving income from all of the shares you are a part of! Wonderful venture, right?
This is why the Thailand real estate industry has been miles ahead in making this a norm for the real estate market and for potential investors. Real estate is easy and worry-free when it comes to possible losses and market failure. Major cities in Thailand such as Bangkok, and Pattaya have witnessed significant improvements and changes in their real estate market because of real estate investments trusts, with multiple commercial buildings and residential units being developed everywhere.
Kickstarting a startup in Thailand can benefit the most from the mechanics of real estate investment trusts. Let us discuss why:
New to the market? Worry no more; a professional has you covered!
Investing in real estate investment trusts costs you less worry and tasks when it comes to property management. You can just go ahead and earn passive income for you and your startup venture without needing to worry about the growth of the properties you have a share in. REITs are managed by professional teams with real estate expertise in the market. These professional individuals are taking care of leasing, maintenance, property acquisition, management and all the technical stuff. Investors can benefit from the REITs without needing to worry about how to manage the property itself. Startups can use this advantage to focus on their newly built businesses and ventures while earning something from REITs.
A stable and regular income is waiting for you!
By Thailand’s laws, real estate investment trusts are required to distribute a significant portion of their income as dividends to shareholders. REITs in Thailand distribute this income to investors quarterly, which gives a steady cash flow to its investors. Investing your startup business in this venture allows you to discover growth opportunities for the nature of your startup while at the same time making sure that a steady stream of passive income also arrives to you quarterly. This ensures longevity and sustainable growth that will surely be beneficial to your startup business.
A door for opportunities and continuous growth from multiple investment opportunities!
Real estate investment trusts give opportunities for diversification. Meaning, you can extend your investments to a lot of real estate portfolios and not limit your shares to only one. Through investments in REITs, startup companies can be exposed to a lot of business portfolios and other real estate investment opportunities that will not only expand your credibility and network, but can also help you gain customers that will send your startup into the mainstream. Aside from reducing the risk to losses from only one investment in a single property, it gives multiple stable returns.
It is for the long term!
The high dividends you can get from real estate investment trusts equate to long-term capital appreciation. Over time, market value from the shares you have been a part of will keep increasing, which will surely help your startup business come to life and achieve the success and goals you have on your vision board. Business startups in Thailand have preferred to invest in REITs than buying properties—this has opened opportunities in making sure that losses will be minimal while ensuring that longevity for both the investment and the startup will be catered to.
REITs help startups.
In conclusion, REITs can help startups in Thailand to reach their goals.
Thailand’s current market is growing faster. With its location in Southeast Asia, it becomes a huge potential market for business and tourism. Starting a startup in Thailand would be a smart move in its current state, but doing so by investing in real estate investment trusts can send your plans to propel into the sky of success.
With its capability to deliver regular income returns and provide a network of opportunities for connections and experience without the need for you to monitor each and every process and transaction that comes with the investment, REITs are truly a haven for startup business owners in Thailand… and the time is NOW.
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