All About Real Estate Funds

Real estate provides an interesting and much needed alternative to mainstream investments as it is one of the few sectors that have outperformed inflation and slack in GDP over time. However, homeowners cannot deny the risk property deflation seems to pose.

Fortunately for investors, there is a healthier alternate, real estate funds in India, which doesn't give the security of ownership but guarantees better risk management. The follow-up of the blog delves into the risks and advantages of it.

What is it?

Real Estate Funds in India mean a professionally managed and privately raised pool of fund that will be used to invest in diversified real estate holdings. Here you are one of the private investors whose money is combined and invested in an array of projects. Thus, you are not committed to a single venture but your money is spread around multiple projects. 

Rewards

·         Minimum commitment with the ventures and hence no headache of upkeep.

·         Your net income is cushioned—by investment in an array of projects—against any specific glitches that can hard hit a particular venture. 

·         Looking for clear deeds and reputed builders is no longer your worry

·         Although it is a growth oriented long term venture, you can expect both dividend income and capital gains from the sale of appreciated property within the portfolio.

·         For tax conscious investors, there is good news in form of special tax benefits on the returns from an REIT.

Risks

·             Like any other industry, investors should expect to be hard hit if the real estate sector as a whole sees a dip.
·             The returns are highly volatile i.e. expect huge deviations from the ballpark. It can be for your benefit or loss.
·             Being a long term commitment, investors should not expect an exit midway without being charged on the profit.
Even though you invest a substantial amount, you can’t claim ownership on a unit.

FFor more details : http://www.everstonecapital.com/