Real Estate Investment Fund: What is it?
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Real Estate Investment Funds (FII) are one of the types of investment aimed at financial investment in the real estate market. Real estate investment funds are made up of commercial enterprises, such as hospitals or shopping malls.
Considered an alternative for those who like to invest in the real estate market, investment funds are an option to invest without all the bureaucracy that the real estate sector normally requires, such as contracts, deeds or tax payments.
Since shares in real estate investment funds can be purchased on the Stock Exchange by any interested investor, we at Citas have brought you an article to help you understand what this investment option is and what its advantages are. Keep reading!
What are FIIs?
Real estate investment funds are focused on financial investment in the real estate market. Thus, the investor receives profits from all operations in the sector, such as buying, selling and renting properties, without having to manage or purchase the property.
Brick Funds, as investments in buildings are known, are just one type of investment. Another option may be to purchase Paper Funds, or debt securities from the real estate sector, such as Real Estate Credit Letters (LCIs) or Mortgage Letters (LC).
How do FIIs work?
Real estate funds are managed by financial institutions authorized by the Securities and Exchange Commission (CVM). The institution is responsible for the maintenance and proper functioning of the fund.
Composed of shares, FIIs can be traded on the Stock Exchange with the intermediation of the financial institution. After acquiring the shares, the investor starts to profit from the appreciation of the real estate developments through the monthly return on the investments.
Public offering is also another option for investing in real estate funds, in which the investor can reserve the desired shares of FIIs that are making new issues. The amount received is proportional to the amount invested or through subsequent sales of the shares for a higher value .
Advantages of investing in Investment Funds
Investing in the traditional real estate market is considered conservative and, although it has advantages, it is surrounded by bureaucracy and unforeseen events. Thus, buying the property, renting it out and carrying out maintenance are among the responsibilities of traditional investment.
When talking about financial investments from real estate investment funds, some advantages can be listed, such as:
- Investment free from Income Tax;
- Less bureaucracy and practicality;
- Low initial investment;
- Investments in large projects;
- Fund management by professionals;
- High liquidity.
The lower initial value works as an attraction for investors who like the real estate market without having to pay a large amount to obtain possession of the property.
Likewise, due to the great diversification, investment income is frequent and distributed among the fund's shareholders. As all investments increase in value, the increase in the value of real estate contributes to the appreciation of the real estate fund and the shares acquired by investors.
If you are interested in investing in the real estate market , be sure to count on specialized help to find the ideal FII for you. At Citas , you can talk to our team and find the opportunity of your dreams.
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