Mutual Funds
Investment companies investing in investment instruments including real estate. Mutual funds are popular to investors and represent equity in a professionally managed portfolio of securities. Major benefits of investing in real estate mutual funds are:
- Small minimum investment. An investor with limited funds can accomplish diversification by owning many securities in the portfolio.
- Diversification. Each fund share provides an investor an interest in many real estate companies.
- Automatic reinvestment. Most funds permit reinvestment of dividends and capital gains. Funds usually do not assess a sales fee on automatic reinvestments.
- Automatic withdrawals. Many funds permit shareholders to withdraw funds on a periodic basis.
- Liquidity. An investor may redeem the shares owned.
- Switching. An investor may change in his investments as his objectives change.
Mutual funds are of different types, according to structure, the fees charged, means of trading funds, and investment objectives. In open-end funds, investors buy from and sell their shares back to the fund itself. An example is Fidelity Real Estate. On the other hand, closed-end funds have a fixed number of shares outstanding, which trade among individuals in secondary markets like common stocks. All open and closed-end funds have management fees. A major point of closed-end funds is the size of discount or premium, which is the difference between their market prices and their net asset values (NAVs). Some funds sell at discount, which may make them more attractive. Funds charging sales fees are referred to as load funds. Load funds usually do not do better than no-load funds. Some analysts feel investors should buy only no-load or low-load funds. The prospectus of a real estate fund includes information as the fund's investment objectives, way of selecting securities, management and sales fees, and other costs.
Popular Real Estate Terms
Payments made to enhance the appearance and conditions of real estate property. In so doing, the market value of the property should increase. Examples of renovation costs are siding, ...
Unexpected growth in an urban locality. ...
Simulation that enables investors to determine variations in the rate of return on an investment property in accordance with changes in a critical factor. It is an experiment with decision ...
Document describing the benefits and provisions for people or businesses covered by group insurance. Document in life and health insurance issued to a member of a group insurance plan ...
Loan that combines smaller loans into one larger loan and typically arises from refinancing debt. It typically results in a lower overall interest rate, longer payment schedule, and lower ...
Federal agency providing home financing to qualified people in low-income, rural areas. ...
Opening in the wall of a structure to let in air and light. ...
Individual who will receive an inheritance upon the death of another. The proceeds of an insurance policy may be in a lump sum annuity. Real estate also passes to the beneficiary. ...
Difference between cash revenue less cash expenses before taxes associated with rental property or a real estate investment. ...
Have a question or comment?
We're here to help.