Real estate. Investment funds

Category: Information | Date: 2012-04-10

The largest in the world economy has always been a real estate market. And annual turns in this market amount to tens of billions of dollars.  In any country, the government holds all real estate transactions under special control, which are necessarily taxed.

Back in the nineteenth century, a model of investment funds was developed in the United States.  It’s easier to put it, such funds are organizations that invest in real estate or mortgage loans. Profit is obtained by increasing prices for real estate. Other income is renting real estate, receiving mortgage interest. The main feature of investment funds – they are exempted from corporate income tax, pay only tax on income. Thus, double taxation can be avoided.

Real estate funds are more profitable organizations than, for example, joint -stock funds. They are subjected to less risks – traditional satellites of the market operations. Investing in the real estate fund is more mobile. This means that investors at any time buy or sell property or securities. They can invest their money in objects that are located in various regions. This also reduces the risk of loss of income.

But not everything is so rosy. Investment funds have disadvantages. Some of which grow from their advantages. For example, giving ninety percent of income to shareholders, funds only ten percent invest in circulation. This significantly slows down the growth of their assets.