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  • FIRST POST
    • krippo
    • By krippo 18th Jun 17, 5:11 PM
    • 13Posts
    • 1Thanks
    krippo
    Real Estate Funds
    • #1
    • 18th Jun 17, 5:11 PM
    Real Estate Funds 18th Jun 17 at 5:11 PM
    Hi there!

    According to the fact, the properties prices increase almost every year, I am thinking about investing in properties, however I don't have enough capital to buy the house or even a flat.
    I was thinking about real estate funds.
    Is it worth to invest there?
    How much capital do I need?
    What are the fees and other catches?

    Best Regards
Page 1
    • dunstonh
    • By dunstonh 18th Jun 17, 5:35 PM
    • 89,599 Posts
    • 56,078 Thanks
    dunstonh
    • #2
    • 18th Jun 17, 5:35 PM
    • #2
    • 18th Jun 17, 5:35 PM
    According to the fact, the properties prices increase almost every year
    It is not a fact. How do you explain the years when they go down in value?

    I was thinking about real estate funds.
    Is it worth to invest there?
    As part of a balanced portfolio, you tend to find most models put property at no more than 10% of the value depending on target risk level.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • bostonerimus
    • By bostonerimus 18th Jun 17, 5:49 PM
    • 1,126 Posts
    • 632 Thanks
    bostonerimus
    • #3
    • 18th Jun 17, 5:49 PM
    • #3
    • 18th Jun 17, 5:49 PM
    Real estate funds and trusts come in lots of different flavors and generally form a small percentage of a portfolio. They are an alternative investment that is held to compliment a core stock and bond portfolio.
    Misanthrope in search of similar for mutual loathing
    • Linton
    • By Linton 18th Jun 17, 6:17 PM
    • 8,496 Posts
    • 8,445 Thanks
    Linton
    • #4
    • 18th Jun 17, 6:17 PM
    • #4
    • 18th Jun 17, 6:17 PM
    Property funds mainly invest in commercial property such as office blocks and shopping malls. This market behaves very differently to the residential property market. As others have indicated it's a specialist area and not suitable as a single holding for the small investor.
    • eskbanker
    • By eskbanker 18th Jun 17, 6:42 PM
    • 5,815 Posts
    • 5,707 Thanks
    eskbanker
    • #5
    • 18th Jun 17, 6:42 PM
    • #5
    • 18th Jun 17, 6:42 PM
    I am thinking about investing in properties, however I don't have enough capital to buy the house or even a flat.
    Originally posted by krippo
    Why not concentrate on saving a deposit for a flat, perhaps using Help to Buy or Lifetime ISAs with their 25% government bonuses?

    Investment is typically (though not exclusively) for those who have enough financial headroom to risk money that they're not relying on.

    If you buy your own property (with mortgage assistance) then you should benefit from long-term value gains (negating short-term volatility) as well as a range of other advantages, including CGT exemption and not having to pay rent.

    Property ownership isn't for everyone but I'd hazard a guess that most people buying into property funds, etc, would already have bought their own home as a precursor to investing.
    • krippo
    • By krippo 18th Jun 17, 7:06 PM
    • 13 Posts
    • 1 Thanks
    krippo
    • #6
    • 18th Jun 17, 7:06 PM
    • #6
    • 18th Jun 17, 7:06 PM
    Many thanks for your replies!

    I have already got property where I live in (mortgage), but I don't get any profit aside from not having to pay rent.
    I have asked my financial advisor what should I do to buy another one for rent, but he told me I need at least 25% of deposit. And I don't have such money right now.
    • eskbanker
    • By eskbanker 18th Jun 17, 7:29 PM
    • 5,815 Posts
    • 5,707 Thanks
    eskbanker
    • #7
    • 18th Jun 17, 7:29 PM
    • #7
    • 18th Jun 17, 7:29 PM
    I have already got property where I live in (mortgage), but I don't get any profit aside from not having to pay rent.
    Originally posted by krippo
    But if your property is increasing in value then you are earning a profit, albeit not in liquid form - if it's not growing in value then why do you think property investment is a good idea?

    I have asked my financial advisor what should I do to buy another one for rent, but he told me I need at least 25% of deposit. And I don't have such money right now.
    Originally posted by krippo
    Your financial advisor will presumably have a much better idea of your finances and your objectives, etc, than you've disclosed on here, so what does he recommend you do?
    • badger09
    • By badger09 19th Jun 17, 1:03 PM
    • 5,424 Posts
    • 4,658 Thanks
    badger09
    • #8
    • 19th Jun 17, 1:03 PM
    • #8
    • 19th Jun 17, 1:03 PM
    krippo

    Do you have cash savings? enough to cover say 6 months expenditure? If not, then I would make that my 1st priority over investing more in property.

    Are you saving into a pension? Do you have other investments? If not, why not?

    Have you heard the phrase 'don't put all your eggs in one basket'
    • bostonerimus
    • By bostonerimus 19th Jun 17, 1:10 PM
    • 1,126 Posts
    • 632 Thanks
    bostonerimus
    • #9
    • 19th Jun 17, 1:10 PM
    • #9
    • 19th Jun 17, 1:10 PM
    Most real estate funds invest in the commercial sector so you wouldn't be replicating an investment in your residential property. 10% would not be a bad move......but check you don't already have real estate in any multi-asset funds you own.
    Misanthrope in search of similar for mutual loathing
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