Real estate fund: What is it & worth it?

What is this & worth it?

A real estate fund is basically a type of investment fund. This means that capital is pooled by investors in order to invest them collectively in value investments. In the case of a real estate fund, the investment consists of land and building land. The term real estate fund is often equated with real estate funds, as they often focus on the acquisition of land. The real estate fund is managed by an investment company. This is responsible for the investment of the capital and the management of the acquired land. It also handles the distribution of the winning shares to investors.

How are the funds from the real estate fund used?

From the funds raised by the fund, land is acquired, possibly processed and then marketed and resold or rented. Investors are issued certificates representing a certain share of the fund’s assets. Depending on the type of operation, a pro rata profit distribution to investors takes place at certain intervals.

What are the benefits of real estate funds?

By investing in real estate funds, you can participate in the boom in the real estate market without having to buy land for it yourself. You save yourself the effort involved in buying real estate. You also do not have to worry about renting or reselling the property. The investment companies of real estate funds usually have qualified personnel with expertise in the sector. In addition, you can also participate in the real estate market with small amounts of money and minimize your risk of loss.

Long-time experienced real estate agents wanted for existing customer support!

How do I find a suitable real estate fund as an investment?

  1. Property funds are suitable for you if you want to invest in land and large construction projects with small sums
  2. Choosing a fund that suits you depends on various factors such as your willingness to take risks and your capital
  3. Two different legal structures exist for real estate funds:
  • Open property funds invest in many properties, spreading the risk of loss
  • closed-end real estate funds invest in a predetermined property or project, which increases the risk of loss but usually brings higher returns

If you want to invest in a real estate fund, you have a wide range of available funds. First, you should decide which legal model for real estate funds suits you. This depends on your return expectations, your available capital and your willingness to take risks. In Germany, there are two types of legal constructions for real estate funds: open and closed-end real estate funds. We specialize in off-market investment properties and will be happy to talk to our colleagues, who will be happy to help you.

Open land funds

Open property funds are considered special property assets. The number of certificates issued is not limited and no amount is set for the certificate capital. These open-ended funds allow investors to participate in investments in real estate with relatively small amounts. Commercial land for larger construction projects is usually acquired from open land funds. Privately used areas are rather marginal. Open property funds operate on the principle of risk diversification. The capital from the fund must be divided into a certain number of properties, depending on the size of the fund. This reduces the risk of loss for investors. If individual properties do not make a profit, this can be offset by profits from other properties. In addition, fund shares can be purchased and returned at any time. Upon return, the investor has the right to pay off his share of the fund’s assets. In the case of distributive funds, profits, for example through rental income, are usually distributed once a year to the holders of the share certificates. Other funds automatically reinvest the profits. This also benefits investors, as it increases the value of the shares.

Closed property funds

In the case of closed-end funds, a fixed amount of shares is issued or a fixed amount of capital is raised. When the necessary funds are generated, the fund is closed. After that, no further shares will be issued and no shares can be returned until the term of the fund has expired. The minimum deposit is usually significantly higher for closed-end real estate funds than for open ones. The land to be financed is fixed from the outset. Again, these are mostly commercial areas for larger projects. Normally, a closed-end fund is created to realize a single project. Compared to open-ended real estate funds, closed-end funds often result in a higher return. In addition, investors know quite well which project is being invested in. They have no say in open funds. However, as the money is invested in individual projects in closed-end funds, the risk of loss if the project fails is also higher.

Do you have any questions or would like to test the real estate franchise?

We look forward to hearing from you!

What are the best real estate funds at the moment?

The real estate and real estate market is booming in 2018 and thus real estate funds are constantly increasing in volume and yielding a lot of returns. Open-ended funds with regular profit distribution are very popular at the moment. DWS land ownership europa and Deka-ImmobilienEuropa invest in land and real estate within Europe. Both are predicted to have a positive performance. Globally, the DWS is in a good position. With German funds, UniImmo Deutschland or Fokus Wohnen Deutschland are recommended as top performers among the real estate funds.

Benefits for Investors & Owners of Registration with E1 Holding

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Investing in a secure future

The E1 Investments concept offers a proven system for the solid development of a business as a broker and owner of a real estate business. E1 Real Estate has the infrastructure and operating systems that enable us to offer first-class services with a team of brokers. You are investing in the market of the future.

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Real estate prices analysis for 80 locations throughout Germany

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