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Adding Real Estate To Your Portfolio

Author: Navjeet Kaur
by Navjeet Kaur
Posted: Oct 29, 2013

We all are aware of the fact that real estate is a part of the capital allocation for both retail investors’ and institution and in this situation an increased development in real estate funds has been noticed. Due to real estate investing capital intensity and its requirement for active management the increment in institutional global real estate opportunities, are progressively moving to real estate funds in order to allow for accurate asset management.

Similar holds true for retail investors, who by now have moved to much larger selection of real estate mutual funds, granting way for efficient diversification and capital allocation. Like other investment sectors, real estate holds its own benefits along with its disadvantages. Moreover, real estate should be taken as most investment portfolios, and we should not forget that REITs that is real estate investment trusts and real estate mutual funds are the best method for filing hat allocation. Investment in this field has lately been dominated good deal of investors, like that of pension funds, large financial institutions and other insurance companies. And all thanks goes to globalization for creating real estate investing and new offshore opportunities, which allows for greater return potential and diversification, and that creates an increasing trend of finding a permanent area for real estate in institutional portfolio allocations.

But we can not neglect the fact that the permanent allocation of real estate capital comes with many noticed hurdles. First of all is, capital intensive, not like stocks that can be bought in smaller increments, commercial real estate investments requires relatively larger sum, and direct investments usually result in weak portfolios and bring on risks in either property or location type. Real estate also needs very active management, which requires great deal of labor making it a labor intensive field. Thus managing its allocation needs important and significant resources when compared to traditional investments. All this results into factors like that of; institutions tend to concentrate toward real estate funds and funds of funds, so that the management efficiency and capital distribution can be increased. This similar advantage that an institution gains from real estate funds can be gained by retail investors through REIT exchange traded funs or the REITs itself and by some real estate mutual funds.

There are several ways through which retail investors can obtain exposure to asset class and access the return potential.

Many investors who may not have considered real estate allocations for their portfolios fail to acknowledge the fact that they may already be investing in real estate by owning a home, due to which not only do they already have real estate exposure, but can also take additional financial risk by having a home loan. For most of the part, it proves to be beneficial and can help many individual through a mass capital required for retirement.

Though retail investors can take into account home ownership during conduction of their portfolio allocations, and even liquid investments can also be considered for those with the trading skills. For complete information on buying Flat in Mohali or for buying any Plot in Mohali contact us now

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For complete information on buying Flat in Mohali or for buying any Plot in Mohali contact us now

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Author: Navjeet Kaur

Navjeet Kaur

Member since: Oct 29, 2013
Published articles: 896

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