REITs for Beginners: Income, Risk, and What to Check
A practical checklist for evaluating REITs beyond headline yield, built for first-time Singapore investors.
The Compound Club Editorial
The Compound Club Contributor · 25 Jan 2026 · 9 min read
How REITs Actually Generate Returns
REIT returns usually come from distributions plus unit price movement over time. Both are influenced by property quality and financing conditions.
A stable distribution today does not guarantee stability next cycle. You need to understand what supports that payout.
Debt Metrics You Must Watch
Focus on aggregate leverage, interest coverage, and refinancing schedule concentration. These metrics shape downside risk during higher-rate periods.
When refinancing pressure is clustered in one period, distribution reliability can be affected if financing costs jump.
Tenant Quality and Occupancy Matter More Than Hype
A diversified, high-quality tenant mix generally improves resilience across economic cycles.
Check occupancy trend direction, not just one-quarter snapshots. Trend deterioration often appears before headline numbers break.
Positioning REITs in Your Portfolio
REITs can be a useful income sleeve, but concentration risk is real when investors over-allocate for yield comfort.
Treat REIT exposure as one piece of your broader allocation that includes growth and emergency liquidity.
Frequently Asked Questions
Heavy refinancing concentration with weak interest coverage can become a serious risk under higher rates.
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About the Author
The Compound Club Editorial
The Compound Club Contributor · 25 Jan 2026 · 9 min read
Youth-first finance educator focused on actionable Singapore context.