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
A two-by-four used for wall resilience and partitioning. Studs rest on it. ...
The tenant is forced to leave the premises if he complains about the poor condition of the apartment or office space he has leased. This type of eviction is illegal in many states. ...
Refers to state statues protecting the public against securities frauds of real estate companies. ...
The construction of a highway right way over a privately held parcel of land. Property owners are entitled to compensation for the value of the property usurped by a highway easement. See ...
Precalculated tables providing the present values of $1 or an annuity of $1 for different time periods and at different discount rates. ...
A right or interest in property held by a third party, which often limits the use and diminishes the value of the property, but usually does not prevent the transferring of title. The more ...
Location Analysis is the appraisal of a general geographic area for a particular use. A Residential Real Estate Market professional (or consumer) rarely deals with a Location Analysis ...
Property tax that varies in rate depending on the zoning classification (use) of the property. ...
Latin for at first sight. Facts assumed to be true unless subsequent evidence disproves it. ...
Have a question or comment?
We're here to help.