Despite the economic crisis triggered by the pandemic in 2020, the real estate markets in many countries around the world experienced an unprecedented surge. In times of uncertainty, coupled with declining deposit rates in banks, individuals tend to seek alternative investment options, with real estate being one of the most comprehensible choices.
Moreover, investing in real estate does not necessarily require large sums of money. Thanks to specialized funds, one can start with a modest investment.
Real estate investment funds own and manage portfolios of properties that generate income. Typically, each fund specializes in a particular sector of real estate, such as residential or commercial, although more diversified options are also available.
The advantages of such funds for retail investors include:
They allow investments in real estate even with a small capital, whereas purchasing a property outright requires significant financial commitment. Investors do not need to spend effort searching for properties or managing them.
This asset class is highly liquid. Owning a share rather than a specific property enables investors to buy and sell it with greater flexibility.
It can be utilized for portfolio diversification.
Dividends.
However, there are downsides. Real estate investment funds carry risks similar to any other asset. They are subject to fluctuations occurring in the real estate market. There are times when the value may appreciate very slowly.
