Mutual Funds
Investment companies investing in investment instruments including real estate. Mutual funds are popular to investors and represent equity in a professionally managed portfolio of securities. Major benefits of investing in real estate mutual funds are:
- Small minimum investment. An investor with limited funds can accomplish diversification by owning many securities in the portfolio.
- Diversification. Each fund share provides an investor an interest in many real estate companies.
- Automatic reinvestment. Most funds permit reinvestment of dividends and capital gains. Funds usually do not assess a sales fee on automatic reinvestments.
- Automatic withdrawals. Many funds permit shareholders to withdraw funds on a periodic basis.
- Liquidity. An investor may redeem the shares owned.
- Switching. An investor may change in his investments as his objectives change.
Mutual funds are of different types, according to structure, the fees charged, means of trading funds, and investment objectives. In open-end funds, investors buy from and sell their shares back to the fund itself. An example is Fidelity Real Estate. On the other hand, closed-end funds have a fixed number of shares outstanding, which trade among individuals in secondary markets like common stocks. All open and closed-end funds have management fees. A major point of closed-end funds is the size of discount or premium, which is the difference between their market prices and their net asset values (NAVs). Some funds sell at discount, which may make them more attractive. Funds charging sales fees are referred to as load funds. Load funds usually do not do better than no-load funds. Some analysts feel investors should buy only no-load or low-load funds. The prospectus of a real estate fund includes information as the fund's investment objectives, way of selecting securities, management and sales fees, and other costs.
Popular Real Estate Terms
Real estate not subject to property tax such as that owned by nonprofit entities including charitable, governmental, religious institutions. ...
When you hear someone in real estate saying there will be a boring test, they don't mean a dull exam is coming up. What is a soil boring test? Let's find out the meaning of a boring test! ...
To put it simply, acquisitions are a common occurrence in the business world, and they happen to small, medium, and large businesses alike. The definition of acquisition is a company ...
The Multiple Listing Service (MLS) is an exclusive database of properties created by real estate agents and brokers. The idea behind the creation of the Multiple Listing Service (MLS) ...
We call a concept ostensible when, at first sight, it appears to be accurate or valid. However, upon closer inspection, it proves to be a half-truth or completely false. For instance, Dale ...
A long-term lease of only land. ...
Agreement between the lessee and lessor specifying the lessee's rights to use the leased property for a given time at a specified rental payment. As rental payments are made, rent expense ...
In everyday discourse, a merger defines the combination of two entities, be it real estate or two companies, into a single and legit one. We should make a difference between a merger and ...
The down payment on the price of a real estate. For example, it is customary to make a down payment of 10% of the value of a real estate parcel upon signing the purchase agreement. ...
Have a question or comment?
We're here to help.