Real Estate Investments (REIT) is about to change
Sep 1, 2023
Over the past two decades, real estate investments (REIT) have delivered favorable yields in many countries, outpacing the global market, yet it's an asset class out of reach for the majority of the population. This is about to change.
Let's look at some annual returns:
United States: 5.4% (S&P Case-Shiller Home Price Index)
Canada: 6.7% (Teranet-National Bank House Price Index)
Australia: 7.0% (CoreLogic Home Value Index)
Singapore: 5.4% (URA)
Thailand: 4.9% (Bank of Thailand)
Malaysia: 5.1% (NAPIC)
Real estate has outperformed both stocks and bonds in average annual return. A study by NCREIF found that over 20 years:
Real Estate: 8.7% (NCREIF Property Index)
Stocks: 6.1% (SP500 Index)
Bonds: 5.2% (Bloomberg Barclays U.S. Aggregate Bond Index)
Despite the potential yield, the $326.5 trillion real estate market is inaccessible to the majority. Until now... How can fractional ownership disrupt and benefit the real estate market? At RioEx, we've broken down the benefits into 4 pillars:
By investing in fractions of multiple properties, investors can spread their risk across different assets, aligning with the principle of reducing risk through diversification.
Lower cost of entry
Sharing the financial responsibilities with other investors reduces the individual burden and initial cost of purchasing a property, making real estate investment more accessible and cutting the entry cost from 6 figures to potentially 3.
Investors have the opportunity to use and potentially earn income from the property they own a fraction of, either through personal use or rental yield.
Flexible exit strategy
Due to the lower cost of entry, Investors can sell their fraction to a bigger pool of potential buyers, enabling faster liquidity and transaction settlement compared to traditional real estate investments.