REITs allow you to have a share in income producing Philippine real estate without doing a lot of work. The whole process is very easy, especially if compared to buying physical property and renting it out yourself.

REITs are bought and sold in the Philippine Stock Exchange (PSE) and you would first need an account with a trading participant or broker. I would suggest sticking with the big online brokers like COL Financial, BPI Trade, First Metro Securities and BDO Securities. Once you have an account, you would need to give them permission to create a NoCD subaccount for you. NoCD stands for Name on Central Depository – this subaccount is held under the Philippine Depository and Trust Corp. (PDTC). PDTC is the custodian of the scripless/online shares in the PSE. The vast majority of shares of stocks in the PSE (including REITs) are under the custody of PDTC. Once all of that is set up, it’s just a matter of transferring funds to your brokerage account and buy your first REIT.

Congratulations! You are now a landlord with a portfolio of commercial buildings generating rental income. You then wait for what I call D-Day or Dividend Day. This happens quarterly when the REIT hands out dividends. The money lands in your brokerage account and you can either withdraw it or better yet, invest the dividends so you will have more REIT shares – so you receive more dividends to buy more REIT shares to receive more dividends…

My last D-Day was a few weeks ago when I received around 3000 pesos in quarterly dividends from AREIT (Ayala Land). Of course, it went straight into buying more AREIT shares. Earning passive income is awesome and I hope more Filipino investors consider this asset class.