Real estate fund versus group real estate investment: what's the difference?
Investing in real estate is a popular way to build wealth and generate income. But when it comes to choosing the right real estate investment, investors may face a number of choices. A common consideration is between REITs (Real Estate Investment Trusts or real estate funds) and group real estate investments. But what exactly is the difference between these two investment methods?
What is a REIT? A Real Estate Investment Trust (real estate fund), or REIT, is an investment vehicle that pools investor money to acquire a portfolio of real estate assets. Imagine a REIT owns 100 office buildings or a collection of hotels. They are usually organised around a specific type of property, such as shopping centres, office buildings or even hospitals. A distinctive aspect of REITs is that they are income-oriented investments. It is common for 90% or more of a REIT's properties to be leased out at any given time. Investors are often attracted to REITs because of their stable income and dividend payments.
What is Real Estate Investment in Group? On the other hand, group real estate investment, or syndication, usually involves a single asset with the intention of adding value. Many deals around group real estate investment are related to the development of new properties, renovations of existing properties, or there may be an opportunity to reposition or refinance the property to make it more profitable than under the previous ownership. The aim of such investments is often to sell the property at a profit after a certain period of time, benefiting both the principal investor and co-investors.
Main differences between REIT and Group Investment Property
- Number of properties: REITs manage multiple real estate assets, while group real estate investments tend to focus on a single asset.
- Revenue-driven versus value creation: REITs are income-oriented investments with stable rental income, while syndications often focus on adding value to a single property for later sale at a profit.
- Liquidity: Shares of REITs are often tradable on the stock exchange, making them relatively liquid. In contrast, group investment property investments can be less liquid, depending on the specific deal and its terms.
In summary, both REITs and group real estate investments offer unique opportunities and risks for investors. While REITs can offer consistency and stability, group real estate investments can offer higher returns, albeit with potentially more risk. As with any investment, it is crucial to do thorough research and make informed decisions.
Immotokens and Real Estate Investment in Group
Immotokens represents a modern and innovative alternative in the landscape of real estate investment. The platform allows investors to participate in group real estate investments.
For investors who want a more direct ownership stake in real estate, Immotokens offers the "co-invest" option. With an entry starting from €100,000, one becomes co-owner of the property and this is formally recorded at the notary. This option offers direct involvement and transparency in the investment process.
In addition, investors can also opt for the more flexible approach through the purchase of immotokens. These tokens symbolise a participation in a specific real estate project. It offers an easy way to benefit from potential increases in value and possible rental income, without the traditional hurdles of direct property ownership.
What makes Immotokens unique is not only the diversity of investment options, but also the broad focus on different types of investment properties. This ensures a diverse and rich offering for any investor looking to reap the benefits of group investment property.
