Real Estate Investment Fund

Study Notes

To be exempt from income tax, a fund must have at least 50 investors, no single investor can hold more than 10% of the fund's shares, and the shares must be traded exclusively on the stock exchange or organized over-the-counter market.
Capital gains from the sale of shares in a fund are subject to a 20% income tax rate.
Amortization of shares can occur when a fund sells a property and does not reinvest the proceeds.
Other reasons for amortization may exist.
Amortization payments represent a return of the investor's capital.
A fund's shares may be traded on the stock exchange or over-the-counter market.
Capital gains are profits made from the increase in the value of a fund's shares.
Income tax is payable on capital gains when the shares are sold.
The income tax rate on capital gains is 20%.
Amortization can occur in a variety of circumstances.
Location and infrastructure of the property are important factors to consider for future appreciation and ease of renting.
Quality of tenants is crucial for ensuring regular income for the fund.
Tenants who delay payments, break rules, or damage property can cause problems for investors.
There is a direct relationship between the quality of the property and the quality of tenants.
Both factors should be considered when evaluating a real estate fund.
Property location can be central or peripheral.
Commercial areas should be well-equipped with urban infrastructure.
Quality of tenants can affect the fund's returns.
The quality of the property can attract higher-quality tenants.
Evaluating both factors is important for making informed investment decisions.
Understanding the rental history and management performance of a real estate investment fund is important to assess risks involved.
Liquidity of real estate investment funds depends on the interest of buyers, and those listed on the stock exchange are easier to sell.
Price of real estate investment fund shares reflects the value of assets and investors' perspective on performance.
Comparing the price of shares with the net asset value can indicate investment opportunities or problems with the portfolio.
Dividend yield is the rate of return provided by a real estate investment fund with periodic income distributions.
Comparing dividend yields can help investors choose between different funds or other types of investments.
The InfoMoney real estate investment fund comparator is a free tool to access data on all funds traded on the stock exchange.
To invest in real estate investment funds, investors should reflect on their profile and investment goals, find a broker, identify interesting portfolios, study investment policies, assess risks, and be aware of costs.
Periodic income distributions from real estate investment funds are tax-exempt, but capital gains are not.
Past performance does not guarantee future returns, but studying management strategies and historical performance can help choose a real estate investment fund.