What are the advantages of Real Estate Mutual Funds, how are their fund return performances?
The classic understanding for individual investors in real estate investments in our country is to own an asset that has a regular rental yield, especially in retirement, in the following periods after owning a real estate for use, which can be turned into cash by selling it in difficult times, and is minimally affected by changes in value. From the point of view of institutional investors, it is generally observed that corporate profits aim to convert the related profits into assets without being the subject of higher taxes.
Real Estate Investment Funds (REIF), which are not sufficiently recognized in our country because they are new in this sense, which are not based on the old history, are an alternative investment vehicle that responds to these needs and more. Funds are established by Portfolio Management Companies with the approval of the Capital Markets Board and are reliable and continuously audited structures. In this aspect, it also contains a transparent structure.
Funds allow to liquidate real estate, and there are two ways to invest in the fund. First, the real estate owned or purchased for investment purposes is transferred to the fund and in return, a participation share is taken equal to the value of the real estate. Secondly, the price can be paid in cash and invested in the fund based on the value of the participation share at that time. In both cases, at any time, the required amount of the participation shares can be converted into cash in accordance with the return conditions. In addition, 3 of the participation shares.the investment can also be terminated by transferring it to a person. In term funds, at the end of the period, the assets within the fund are converted into cash and distributed to the investor at the rate of the owned participation share.
Just as the assets of the Fund cannot be pledged, they cannot be included in the bankruptcy table, even for the purpose of collecting public receivables. Especially when there are periodic problems in commercial life, foreclosure, mortgage, forced sale may be in question. In fact, after a while, everything can return to normal, but in the troubled process, the risk of not being able to protect assets may also be faced. This is where the fund provides an important assurance and also provides the assurance of “protection of its assets”. Companies or individuals with high assets will not encounter this undesirable situation if they adopt the preference of managing their real estate assets from a single source by collecting them in the fund, and they will manage their assets liquid and efficiently. It is worth recalling that the same advantage applies in terms of heritage management!
Funds make maximum efforts to provide maximum return to their investors, and increasing the return on real estate investment made individually is not possible through personal efforts. However, the funds carry out real estate management in a professional sense and sell real estate with high potential for return, such as land, residence, shopping mall, hospital, school, housing, shop ... at more affordable prices with the high financial strength of the fund and in a more profitable way, and this is reflected as a greater return to fund investors Decently. The fact that the real estate acquired by the fund has a rental yield, so that it determines distributing dividends to its investor from this rental yield as a priority is also an attractive option. Moreover, the investor is not involved in any operational process related to real estate. Land registry works, repair-maintenance, tax, rental, insurance..as such, all kinds of transactions are under the follow-up and responsibility of the portfolio management company.