Wednesday May 25, 2022

Make sure you trade in a real estate fund


Not a real estate fund as a real estate fund. Real estate action funds are often presented as real estate funds. While the real estate fund buys real estate directly, the real estate fund invests only in the shares of companies that are trades on the stock exchange and whose field of business is real estate.

What is the difference between a “real” real estate fund and funds investing in the action of companies doing business in the real estate market?
In recent years, investment opportunities have expanded significantly with a number of new issues. The product is more and can be better adapted to the requirements and ideas of the investor. The consequence of this enrichment offer is that it is difficult to find your way around the offer. Investing in real estate is no exception. There has always been a lot of interest in investing in real estate, but with innovations in the financial product market, access to real estate has also opened up to small investors. There is more a way to invest in real estate with a small initial investment, and therefore it is important to know the differences between them.

The most frequently mentioned option is real estate funds. What is it all about? Simply put, a real estate fund buys various properties, such as office buildings, shopping malls or logistics parks, from which it then receives income in the form of rent. These are high-quality properties, modern or renovated buildings that are long-term leased to quality renters.

Not only do you not buy real estate funds, but so sell and earn real estate over time as the prices rise. It is a seemingly similar procedure, as if an individual, for example, bought an apartment, rented it and sold it after a few years. The difference between an individual investment and an investment fund is a big one. While individuals are worth investing in real estate through the fund, a minimum of two thousand, if they want to buy real estate, it costs millions.

Another important difference is the ability of the real estate fund. In the fund, professionals take care of the investment and the subsequent management of the assets. The fund can buy me different types of real estate and in different cities. This reduces the effect of the risk that the income will be rented in a certain area or that the price of some real estate will fall. As an Englishman, not all two eggs in one coc. A small investor has this possibility of diversification due to its limited resources.

It is not possible to claim that real estate is a certain investment, in comparison with shares, real estate shows a long-term degree of risk in achieving an attractive level of return. Real estate funds are not speculative investments, but long-term and conservative investments.

We often talk about real estate funds even in cases where the real estate fund is not. that it is about real estate funds of events, which are often presented as real estate funds. While the real estate fund buys real estate directly, the real estate fund invests only in the shares of companies that are trades on the stock exchange and whose field of business is real estate.

These real estate companies have a different strategy from real estate funds. Usually, you just don’t buy cash and rent real estate, but engage in risky projects, such as investments in land or construction. The profit from these activities can be you, but it also applies to the loss. This is then reflected in the value of the share, its price is determined not by the value of the project and real estate owned by the company, but by the demand and supply of the stock on the stock exchange, so it may fluctuate more.

In the case of a real estate equity fund, the investor is therefore exposed to a new type of risk, and that is the stock market itself. The prices of real estate companies are influenced by the overall situation on the stock exchange. Paradoxically, they can be affected by seemingly independent sectors such as shares of technology companies.

Odlin are also revenues of the real estate fund and the real estate action fund. While the input of the real estate fund is the rental or eventual sale of real estate, in the case of a real estate action fund, their income is the appreciation of the action or the payment of a dividend.

From these differences, there is also a mechanism that determines the value of the leaf cover. In the case of a real estate fund, the price of the share certificate is related to the value of the real estate that the fund owns. The price of these properties is determined by experts on the basis of the property, the occupancy of the property, the technical quality of the building, etc. And the price of the property develops steadily over time without slight fluctuations.

For a real estate equity fund, the price of the share certificate is derived from the price of the equity in which the fund invests. The price of such shares is determined by developments on the stock exchange and does not automatically mean that the value of the real estate company’s share corresponds to the value of the assets worth the action, but is only the supply and demand for this share. It is therefore true that the shares may be sold “below cost” or may be “pre-sold”, which will subsequently affect the value of the share certificate of the real estate stock fund. And a significant change in the price of the event can occur in a single day.

The real estate stock fund did not stand out from other equity funds, such as energy sector action funds or regional exchange funds. Odlin is just his replacement. The real estate fund, on the other hand, directly manages real estate. This is the reason why these two types of funds are subject to different laws. Until recently, there was a final standard in the Czech Republic only for equity funds, and real estate funds did not come into force until recently.

Due to the different nature of the investment, it is possible for small investors to consider the suit of investing in real estate from a small age, and at the same time they can be sure that the invested funds are taken care of by professionals.

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