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• Stephen Cooper

Real Estate Investment Fund

Real estate investment fund. Information on investing in real estate funds.

Unsure of what type of real estate is best to put investment money into? A real estate investment fund is able to satisfy all types of property interests, and they are generally profitable. A real estate investment fund is attractive not only for individuals, but for government agencies as well. In fact, the Department of Treasury of North Carolina has its own real estate investment fund that they use for the state retirement system.

According to the North Carolina Treasury's website (http://www.treasurer.state.nc.us) a real estate investment fund is where the investor holds "ownership or a mortgage interest in various properties. Investments are made across a wide variety of property types, including offices, industrial, multi-family housing, residential, and retail." This wide range of property holdings takes advantage of a wide range of markets, so while one area of real estate may lag behind, other types can hold up or raise the overall value of the fund.

If a state government sees the wisdom of utilizing a real estate investment fund, then it seems logical that the individual can benefit from it, too. Of course, investing in a real estate fund may require larger sums of money up front in order to purchase fund shares. Governments can easily shell out the money, but how does the average investor get the money for a real estate investment fund? One tax-savvy method is to money saved in an IRA (individual retirement account). The IRS allows individual retirement account money to be used, tax free, as long as it is for the purpose of buying real estate. The only condition to this allowance is that the real estate investment fund must be self-directed, which means that the buyer controls the transactions of the fund, and not a fund manager, as is typically used. The extra time and effort required to do this, though, can be well worth it when considering the potential profit and tax benefits.

Buying a real estate investment fund is an intelligent option now because interest rates are still relatively low and the property values are still on a steep incline. There is always a need for property, so the value of a real estate investment fund, while never assured, is a safer bet than the more volatile stock market.