One of the biggest challenges to real estate investing is getting the funds to make the purchase. This is where real estate funds come into play.
“Real estate funds – both private and publicly traded – offer investors streamlined access to the asset class without the capital requirements or operational headaches of direct ownership,” says Andrew Krei, a chartered financial analyst and co-chief investment officer at Crescent Grove Advisors. “While direct ownership can be financially rewarding, it typically demands extensive capital, time and expertise – and selling can be slow and costly when liquidity is needed.”
Private real estate funds tend to be less liquid and harder to access. They often require multi-year commitments, so weigh the illiquidity against the potential returns before investing, Krei says. “Often these funds will target higher returns by buying properties that have been mismanaged or need capital improvements, allowing the manager to apply their operational expertise to reposition assets, increase rents and sell at higher valuations.”
Read the more in U.S. News.