philreitinvestor.com

REITs are bought and sold in the Philippine Stock Exchange and are subject to investor supply and demand. Economics 101: If demand is great, the price goes up; if the demand is low, the price goes down. In challenging economic times, there will be more sellers of REIT compared to buyers of REIT and this will cause its price to become cheaper. Is that a bad thing? It is – if you’re a seller. But if you’re a regular buyer of REIT and a long term holder, then times like these are a cause for celebration! Its like buying a piece of clothing or gadget on sale. Shoppers are very happy to buy items at a discount during a sale so why should it be any different for investors.

Who does not want passive income these days. Wouldn’t it be nice to have regular income coming in without much effort on your part. Although there are many ways to earn passive income, being a landlord is probably a very straightforward way. So you decide to buy a residential condo unit, one of the many studio units for sale in Metro Manila. You opted to stick with the big developers: Ayala Land, Megaworld or Robinsons. You then hire an interior designer, furnish it, look for a tenant, maintain it, pay the overhead expenses (insurance, condo dues, tax) and so on. When you decide to sell, you hire a broker, pay capital gains tax and hope that it sells soon and not a year later! This doesn’t sound very passive in my opinion.

The Philippine law creating REITs or Real Estate Investment Trusts was Republic Act 9856 or the REIT Act of 2009. Its twofold aim is to help finance / develop infrastructure projects and democratize wealth by broadening Filipino participation in real estate ownership.