8 Reasons To Invest In Real Estate Funds

 Everyone has an acquaintance who invests in real estate. Or is it an uncle, a neighbor, a friend, in short, investing in real estate is part of the culture of the people of our country.

However, although we have been growing 10% per month in the last months in the number of investors in real estate funds, the culture of investment in variable income, because despite the exponential growth, the number of investors is still very small in proportion to our population and well below potential.

Having made this introduction, therefore, what are the advantages of investing in real estate funds?

1- Attractive Dividends

Real estate funds pay up to 6 to 7% (having seen even higher levels a few years ago) of Dividend Yield (ratio between the dividend paid in the year and the price of a share). This number is much higher than the average number of shares on the stock exchange.

Therefore, if you want to receive dividends, you should consider real estate investment funds.

2- Monthly dividends

Most of the shares of companies traded on the stock exchange pay dividends at greater intervals, such as quarterly, half-yearly or even annually. Real estate funds, for the most part, pay these dividends on a monthly basis.

The advantage of the monthly payment is that it is easier to reconcile with the family budget, and this is essential for those who are interested in forming a social security investment portfolio. If monthly income is a differentiator for you, real estate funds are a good option.

3- Positive historical return

The historical return on real estate funds is excellent. The most representative and most historically active members have a higher return than the CDI, since the real estate funds index was created recently and has no long-term history.

4- Low volatility

Even with an excellent return, real estate funds have low volatility (variation in the prices of their shares) when compared to stocks.

5- More liquidity than physical property

Another advantage of investing in real estate funds is their liquidity (ease of turning the asset into cash and vice versa, that is the ease of trading the assets through the purchase and/or sale).

Despite having less liquidity than shares, real estate funds have much greater liquidity than physical properties and are sufficient for most individual investors.

Do this exercise.

How long, on average, does it take to sell the physical property at a fair price?

Possibly months.

In real estate funds, many of them negotiate millions of reais per month. In addition, it is possible to split the investment, that is: he who has an R $ 1 million property and needs to raise R $ 100 thousand, as he does? You need to sell the entire house in Chilliwack BC.

The investor who has the same amount invested in real estate funds can simply sell shares in the financial value he needs. Low transaction costs are also attractive. To sell a property you spend up to 4% of the value in taxes and broker costs.

For real estate funds, the cost is much lower, some brokers even transact real estate funds without charging brokerage from their clients, and without the notary bureaucracy that transacting physical properties brings.

6- Income tax exemption

Another advantage present in real estate funds is their tax exemption. The real estate fund investor does not pay income tax on the dividends received. However, it is important to note, here, that this exemption from income taxes for individuals is only realized if the following three points are observed:

· The fund must have at least 50 shareholders;

· Quotas must be traded on an exchange or organized over-the-counter market; and

· The shareholder cannot exceed 10% of the fund's total shares.

However, practically all loyalists with viable liquidity for the individual investor meets these criteria.

7- Easy diversification with little capital

Another important attraction of real estate funds is their ability to provide their investors with diversification of properties with little money. By way of illustration, when investing in 3 Fiis (it is necessary to study beforehand, obviously), it is possible for the investor to have his sources of income from more than 30 different properties, spread across different geographies.

Another interesting example is the following: with R $ 1 million, an investor is able to buy a good home in Abbotsford BC. With that same value, this investor can buy fifty real estate funds, if he so wishes, and these assets will provide him with a much greater diversification, mitigating (and much) his risk.

8- Greater tranquility

Another attraction of the FIIS is the outsourcing of asset management. There is no work for the investor to manage the properties since professional management is in charge of this task. With this, the investor does not have to worry about going after a tenant to occupy a vacant unit, or meeting with a lawyer to go after a delay in paying the rent.

There are a management team and advisors who work for the real estate fund, and it is their job to manage the property. Of course, this work is not done for free, and fees are charged by the administration and management of real estate funds for the execution of this work.

However, even in this case, the investor can rest assured, given that such fees are charged automatically in the FIIS 'own accounting DRE and the investor already receive dividends with these fees already paid.