Real estate investment fund: know what it is and which is the best to invest?

Real estate investment fund More people are putting their reserves into a real estate investment fund every day. The reason is greater security than stocks and greater earnings than savings.

real estate investment fund

Many years ago it was common to invest the earnings in the purchase of real estate and thus live off rent income.

However, over time it became clear that living off rented properties is not always a good idea.

The risk of default, having to keep an empty property or the constant repairs that are needed make this a non-positive investment. That's when the real estate investment fund emerged, it offers benefits with less risk.

Finally, for you to learn more about this type of investment that has been gaining more space in the market, we are going to explain the details.

What is a real estate investment fund?

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The real estate investment fund it is a type of set of investors that gather their funds so that the amount is applied in the same project.

Therefore, these projects are usually the construction of a new real estate development or the acquisition of a property.

Each investor buys a share of the fund and receives the earnings related to his share of the share. You will not make the property decisions, but you will be a shareholder, and you will be part of the shareholders.

In other words, you will have access to a little piece of it.

The advantage of investing in a real estate investment fund is that there is no concern about any problems, everything is resolved by the management team. This makes the option much more positive as it offers quick returns without the problems that a property can have.

Types of real estate fund

There are 4 main types of real estate investment funds, each with its own characteristics. Are they:

  • paper real estate fund

The paper fund is focused on investing in the purchase of real estate securities, such as Certificates of Real Estate Receivables (CRI) and Real Estate Credit Bills (LCI). Here, the objective is to obtain quotas from other funds or from bank loans in the financial sector.

Quotaholders' earnings vary according to the purchase and sale of these securities according to their valuation.

  • brick real estate fund

The brick fund invests in real properties, whether they are already built or still under construction. And not only the purchase of residential properties, stores, malls, offices are also part of the shopping list of a brick fund.

Earnings depend on the success of the project, the return may take a little longer, especially if the investment is in real estate construction.

  • fund of funds

It is a real estate investment fund that invests in other funds by buying a larger number of shares and dividing among its investors.

  • hybrid fund

This is the most diversified type of fund, that is, it has more chances of yield. The administrator can choose to invest in any of the other three types of funds or even split the amount between different funds.

Real estate investment fund: fixed or variable income

Despite offering some stability with earnings periodically, real estate funds cannot be considered fixed income investments. This is because several factors can interfere with a shareholder's earnings.

The main factor is the empty property, which reduces the earnings of all fund participants. Another factor is the value of the shares, which can fall and fluctuate like a stock, even the value of the Dolar today is capable of influencing a share investor's earnings.

So you should think of them as variable income, but of course, they have good security.

What is the best real estate investment fund to invest in?

The answer to this profile is that it all depends on your investor profile!

So, today, you can find real estate funds from famous malls, logistics warehouses, apartments, and among other things.

In other words, ask the following question: which of these, according to my investment portfolio, is the best option?

That way, depending on the type of investor you are, you'll know how to choose the best one that fits your profile.

Final considerations

Now that you know what a real estate investment fund is, what are you waiting for to start investing?

See you soon. see too Stock Market: What You Need to Know


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