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Real Estate Funds

Owning a property is a dream most of us have, a dream which can often be too expensive or beyond our reach in most cases. Given the real estate boom in the country, investing in property can be an ideal way to make money, but there are inherent risks involved in such investments, which deter a number of investors from directly putting their hard-earned money into projects. An alternative to directly investing in property is Real Estate Funds, with investors eligible to enjoy the growth of this sector without directly participating in the process.

A Real Estate Fund is a sector fund that predominantly invests in securities provided by companies that invest in real estate projects. In essence, it is a fund that provides capital and investment which can be used by the real estate company to develop properties. This fund is managed by professionals, with investments primarily in stocks of such developers. Return on investment depends on the growth of this sector, with the sale and development of properties helping investors get decent returns.

A Real Estate Fund can comprise investments either directly in real estate companies or in Real Estate Investment Trusts, with the fund managers choosing between these two depending on numerous factors.

Author
Apurva Agarwal
Managing Partner at Universal Legal.

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