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Real Estate Advisor Explains What A Real Estate Investment Fund Is

For an investor looking for a relatively safe investment with a high yield and little hassle, a real estate investment fund in Reno should be a serious consideration. These funds allow investors to pool their money and to spread the risk over several different property types. Plus, someone else does the research and manages the property. Of course, funding can be an issue, but there are different options available to investors.

What is a Real Estate Investment Fund?

A real estate investment fund is set up when a group of people or corporations come together to purchase real estate. The investor basically ends up owning a portion of the property, or holds a mortgage interest. Typically, the group will purchase a wide range of properties including everything from residential real estate to industrial complexes and retail properties. The variation in property types then spreads the risks for investors.

Real Estate Investment Trust (REIT)

A real estate investment trust, or REIT, is a specialized type of real estate investment fund for which shares are bought and sold on the stock market just like a mutual fund. A corporation or trust acquires and manages income producing properties using the investors money. The investor is purchasing not the property, but a share in the corporation. The REIT is then required to take 90% of the taxable income and return it to the investors in the form of taxable dividends.

A Safe Investment

Although a real estate investment fund in Reno is not considered 100% safe, it does possess the potential to provide a high yield with less risk than other investments. In fact, most experts consider it much safer than the stock market. This may be because the risk is spread over a variety of property types including residential real estate, industrial, office buildings, and retail properties. If one is suffering a decline, the theory is that the other property types will make up for the loss of revenue.

Using Their Expertise and Skills

The main reasons why people shy away from real estate are that they do not want the hassle nor do not feel like they have the expertise necessary to make wise investments. The beauty of a real estate investment fund in Reno is that someone else does all the hard work. This includes researching which properties to invest in, and the daily management of those properties. All the investor has to do is find a fund that is performing well and sit back and let someone else do the work.

Funding the Investment

Funding for these groups also has several potential advantages. A REIT may require a smaller amount because it is basically the same as purchasing shares in a mutual fund. However, a true real estate investment fund may require larger amounts to be able to invest. If you are short on cash, the IRS will allow an IRA (individual retirement account) to be used to buy real estate. Unfortunately, this does require the fund to be self-controlled and not controlled by a manager.

For the savvy investor, a real estate investment fund in Reno has several strong advantages over other investments. The risks are spread out over several property types from residential real estate to retail complexes. In addition, someone else does the work of researching which properties to buy, and deals with the daily hassle of managing them. For those who wish to invest in real estate, but do not want the demands, this is an ideal investment.

With over 20 years of experience in northern Nevada real estate, Greg Hughes is an expert at real estate investment fund. His business offers clients a great way to invest in real estate. Sign up for Reno real estate investment advisor Greg Hughes’ special series of reports “The Power Wealth Collection.”