If you have money which you would like to invest then the smartest move that you could probably make would be to invest in real estate. There are a huge number of benefits of real estate investment and those who own properties can enjoy low risk strategy which forms a key part of their portfolio. Unlike investing in stocks and shares real estate guarantees you a tangible asset to invest in and a market which will not be anywhere near as volatile. There are many ways in which you can make money through real estate investment, some like to flip properties quickly, others like to buy with the idea to rent out, and some enjoy investing in private equity real estate groups. To understand more about private equity with regards to real estate, we spoke to the experts at TitleCard Capital to find out.
Private equity funds are nothing new but they didn’t really come about in the real estate world until the early 1990s. The reason behind this was that the housing market had crashed and investors saw this is a greta opportunity to pool their resources and buy multiple properties. Prior to this we had seen some level of group investment in real estate from wealthy families and combined companies, who saw the opportunity.
Benefits To The Investor
There are numerous benefits of investing in real estate this way and in many cases people invest in private equity groups because it is far easier than managing the buying and selling of property on your own. Another benefit which investors enjoy about this is that unlike when buying a property outright, they can invest a smaller amount of money and then use other capital which they have for different investments. In the main investors also rely on these groups as it is they who have the expertise in the real estate market and buying and selling is their bread and butter.
There aren’t too many risks attached to this kind of investment given the constant flow of money that is coming into them, the key risk would be if the real estate market crashed entirely, although even in that situation the fund would be likely be strong enough to see it out, and potentially continue to invest in lower priced properties.
The greatest downside to this kind of investment is that it is one that is rather long term and investors may not see a return for the first 5 to 10 years. Beyond this waiting period however investors will be able to enjoy annual returns on their investment of around 8%, sometimes more. Investors also do not have a say in how the fund invests and they cannot recommend purchases or liquidating assets.
If you want to get involved in real estate this could be a great place to start.