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10 Essential Characteristics of a Real Estate Fund

6 April 2018

Characteristics of Real Estate Funds

Below are some of the essential characteristics which make real estate funds a popular investment avenue

Long-term

The time associated with developing and selling a property renders this investment a long-term investment.

Alternative to buying

Investing in real estate funds negates the hassle of buying a property and eliminates litigation, maintenance and other responsibilities.

Liquidity

Investors have the option of cashing in at any time by selling those funds in a day or two.

Risk

Real estate funds carry the inherent risk of collapse over any fluctuations in overall real estate market trends.

Returns

Although depending on the growth of the sector, most funds are known to offer good return especially in premium real estate locations.

Profit Sharing

Investments in real estate companies offer a chance for long-term growth as opposed to other alternatives where a share of your profit goes to other parties.

Minimal Effort

Investors can enjoy the benefits without having to worry about paperwork, legal status, etc.

Diverse Portfolios

Investing in properties across spectrums provides investors with a chance to reap benefits across growth in different segments.

Low Investment

Real estate fund provides investors with an opportunity to be a part of the lucrative real estate sector without paying exorbitant amounts.

No direct involvement

Typically managed by fund managers, an investor has no direct involvement in determining where his/her money is invested in.

Fees

Most funds charge a certain management and one-time fee, with this amount being equivalent to a fixed percent of the investment amount.

Real estate funds are best for investors who do not want to or cannot own real estate directly. The funds are classified as alternative investments. With a view to increasing the yield potential and distribution of market risks, real estate funds should be used as a supplement to the investment portfolio as the yields do not depend on the development of stocks and bond markets directly. For sound financial advice on best investment opportunities in real estate funds, connect with Dravya Financial Solutions a premier financial services firm offering loan against property, fundraising, debt syndication and financial advisory services in Pune, Mumbai, India 

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