How to invest in real estate funds; see financial tips

Know how to invest in real estate funds is of interest to many investors. Although it raises questions, the procedure is simple and requires little capital to start operations. Check it out below. 

How to invest in real estate funds

Real estate funds have ceased to be a secret among people and have begun to attract the attention of investors. In September of last year alone, the Brazilian Stock Exchange registered more than one million CPFs with shares in this market. 

Just like investment in shares, real estate investment has increased significantly. It's worth noting that considering real estate as an investment is not new among Brazilians. However, many people wonder: how to invest in real estate funds?

Most Brazilians don't have enough money to buy a single property and pay all the fees. In this sense, real estate funds are excellent investment alternatives, as it is possible to invest in the market safely and proportionally. 

What are Real Estate Funds?

FIIs, the acronym for Real Estate Funds, are an excellent choice for diversifying your investment portfolio. Most Brazilians invest in real estate by buying it outright, but not everyone has enough resources. 

In this sense, Real Estate Funds are a simple and quick way to invest in real estate. By investing in the market, investors don't have to go through all the bureaucracy of buying, with the advantage of being exempt from income tax. 

Real Estate Funds are securities made up of Brazil's real estate sector. In addition, just like an investment fund, all the assets are divided into shares of equal value. 

This way, every time the investor trades in this market, he acquires a small part of the property. It's worth noting that the investment is monitored on a daily basis by a manager specialized in the area. 

How the Real Estate Fund works

Now that you know what a Real Estate Fund is, it's time to find out how it works in practice. Check it out below:

1. The entire fund is set up by a manager and divided into several quotas;

2. Quotas are sold on the stock exchange, whether you are an individual or an institutional investor; 

3. This fund buys or builds real estate from the quotas obtained. It is worth noting that it can be invested in financial products from the real estate market; 

4. To guarantee the best return for investors, the fund is managed by a manager who takes objectives into account; 

5. Profits are generated through the commercial exploitation or sale of the properties. It is worth noting that the amounts are divided among the quota holders, according to the proportion invested by each one. 

In short, investment in real estate funds is democratized, with the risk being shared among the shareholders. 

What are the concepts of the Real Estate Fund?

To understand how Real Estate Funds work, investors need to know the main concepts of this market. Check them out below:

• Ticker: The shares of companies remain open, with quotas that are identified by a code, popularly known as a Ticker. When a fund is listed on the Brazilian Stock Exchange, it is identified with a B at the end;

• Portfolio: Investors have a wide variety of real estate ventures that can be operated. The choice of investment and what goes into the portfolio determines its risk, as well as the potential return on the portfolio; 

• Quotas: As with other types of investment, the assets of the Real Estate Fund are divided into quotas. All returns are calculated in proportion to the number of shares the investor holds; 

• Taxation: One of the main characteristics of Real Estate Funds concerns the collection of Income Tax. This is because part of the investment is exempt from this tax, but another part is not;

• Amortization: In some cases, the quotas invested in the Real Estate Fund may be amortized, which are payments representing the return of the capital invested; 

• Ifix Index: Ifix is the index responsible for monitoring the quotas invested in the stock exchange and over-the-counter markets organized by the Brazilian Stock Exchange. 

What are the advantages of Real Estate Funds? 

Real estate funds dilute risk and allow the market as a whole to expand. However, these are not the only advantages of the model. Check them out below:

• Investment in the Real Estate Fund is one of the safest on the market;

• Investors don't need a lot of capital to start trading on this market; 

• One of the best features is how easy it is to buy and sell shares;

• Investors receive real monthly returns; 

• The income is boosted thanks to the income tax exemption; 

• The Real Estate Fund has a wide variety of quotas. 

What are the best real estate funds?

Now that you understand the main concepts, advantages and how this market works, it's time to get to know the best Real Estate Funds. In this sense, it's worth knowing some tips for making your decision. Check them out below:

1. Analyze the market 

Investing in Real Estate Funds is considered variable income. This means that the investor needs to know the real estate market well before starting to operate in this alternative.  

2. Observe the main market moments

Real estate funds can be at different points in time. For this reason, it is necessary to look at the current moment in the market, as well as past profitability. 

3. Find out if the value of the shares is fair 

Before choosing a fund security to invest in, you need to know if the value of the shares is fair. The P/VP is the indicator that divides the price of a fund's shares by its asset value. 

In this sense, if the result is below 1, it means that the shares are being traded at a lower price than the appraised one. 

4. Research the future of the market

Before investing in a real estate fund, investors need to have confidence in the managers. 

After all, these professionals are responsible for evaluating and operating in the best way on the amount invested, without the investor's help. 

It is worth noting that there is a periodically published document known as the "Management Report", which gives a broad overview of the investment made.