Top 4 Benefits Of A Real Estate Growth Fund
August 30, 2022
Besides offering portfolio diversification, commercial real estate can provide investors with steady cash flow, tax benefits, and capital appreciation as compared to other popular assets. With CRE, you remain safe and protected from the high market volatility existing today.
When you own real estate individually, you enjoy many advantages but even a CRE fund comes with its own set of benefits. It can be a great addition to your portfolio and there are several reasons you might want to choose to invest in a real estate fund since everyone cannot afford to buy commercial property individually. Let’s dig deeper into the benefits of the funds.
Tax Benefits of Real Estate Funds
A lot of investors are always on the lookout for investment opportunities that can help save or reduce tax. As a passive investor, a real estate growth fund will appeal to your needs.
By investing in real estate funds, you can enjoy high tax benefits including pass-through depreciation opportunities. This allows you to enjoy a 20 percent deduction on the income tax payable by you and brings with it several opportunities to save and invest more money.
Consistent, Predictable Dividends
Investing in a CRE fund is similar to stock investments. Just like stock distributions, you enjoy regular, consistent dividends with your CRE investment. The dividend is paid every month, quarter, or annually and unlike stock distributions, the dividend rate is usually higher. Hence, if you are looking for an investment product that offers consistent and steady returns over time, CRE fund will be an ideal choice.
Professional Management Means Your Investment is in Good Hands
Just the way professionals manage your funds in a mutual fund investment, this real estate mutual fund will offer the benefits of professional management, ensuring that your money is in safe hands. The expert individual will have good knowledge and real estate background, one who understands the investment strategies and knows how to pick the right market. The expert will also help you choose properties that offer a balance of risks and rewards.
Diversification is Key to Investing
Savvy investors understand the importance of diversification to their portfolios. However, stocks and bonds or mutual funds are not diverse enough to offer steady returns in case of a market downturn. These traditional investments are directly connected with the stock market and they will increase or decrease in value just the way the stock market does.
Through diversification, you can be protected against losses. If one asset class underperforms, you can gain from another asset class. This is why the CRE income fund should be a part of your diversified portfolio.
Notably, it has a low correlation with the stock market so when the market plummets, your investment will not be affected. You can also enjoy diversification within commercial real estate investing. There are different property types you can choose from based on your risk appetite and preferences.
CRE Income Fund is a great addition to every investor’s portfolio and it is a great way to get started with real estate investing.