Real estate funds value pensions, including savings. How to choose such a fund

There is also a growing interest in investing, which can increase the value of deposits and save inflation. Real estate is a popular way of investing. It is also an opportunity to invest in real estate funds. According to him, such a fund to choose, advises Ji Pech, investment analyst Broker Trust.

Interest in investment apartments drove real estate prices to record ages. Along with rising purchase costs and the limited availability of mortgages, which many used for financing, some investors have become more able to realize such properties. However, there are other ways on the market to evaluate your finances through real estate, especially under the funds. According to him, to choose such a fund?

If we take into account, for example, the prices of cracking apartments, then they jumped a little upwards. A 2 + 1 apartment in Prague by 75 m2 in the vicinity of Vyehrad will cost, for example, 5.5 million crowns. And rents in a similar area are around 18,500 crowns per month (without services). It means a year’s return of about one percent, provided that we get 12 hours and we will not be a party to anything for possible repairs. However, the reality will be less favorable for the owner and he will have to deal with the shortcomings of the fine and the costs of the necessary reconstruction, etc.

When we look at the returns of classic open-end real estate funds and leave aside specific funds of qualified investors, we saw returns of between 2.7 percent and five percent for the funds in 2018. In most cases, the funds were able to increase the value of their clients by about three percent, without the work they would have to rent their own apartment.

By investing his pensions in a real estate fund, the investor becomes a so-called sub-party, who is entitled to the fund’s profit from the rent. In return, the profit was paid in the form of fees with the management of the fund, which assumes responsibility for the management of the fund, gossiping the property and the property.

The main benefits of investing in real estate funds are as follows:

  • The fund has more real estate and property in its portfolio, thus reducing the risk in the event that some property will go away.
  • You will get to projects for which the investor does not have the resources, such as large office real estate.
  • The funds have suitable fine conditions, which the investor can usually reach for the rent in his apartment. Often contracts for 5 and 10 years are finely paid, several months in advance are paid, and banks or other entities and the like can guarantee it.
  • You don’t have to look for furniture, property repairs, taxes, etc.
  • You can also invest crowns (from 500 K units).
  • You do not need real estate to build and no worries about flattening.

So how do you find your way around real estate fund offers? Compare parameters such as the past performance of the fund (which of course does not guarantee the performance of the future), the number of properties in the portfolio, the cost of the fund or the debt of the fund. Let’s take a closer look at the specific parameters.

1.Poet property

My real estate fund owns, so its portfolio will be diversified. Pay so that real estate should be optimally of different types (offices, industry, shops, etc.) and in different cities. If there is more tenant in some buildings, it is the only time. This spreads the risk in terms of the failure of them. At the same time, however, the salary that each property means extra costs at first. The fragmentation of the portfolio into many small properties, in which it will be finer, can cause the fund to be cost-effective, thus making a profit for investors.

2.Fund size

Be primarily interested in the fund’s own capital. If you only assess the fund’s assets, it can be sharply blown away by various issues. My fund is, so it usually costs him the cost of the first real estate, respectively, he has relatively low costs in the size of the entire portfolio.

3.Fund management costs

The costs at first reduce the investor’s input, so it would be good to keep them reasonably equal. The biggest cost is the management fee. However, other costs may be associated with the operation of the fund, which should not be left unnecessarily. All types of fees can be found in the fund’s articles of association, which are commonly available on the company’s investment website. First of all, look for the so-called total cost-effectiveness of the fund, which is called TER (Total Expense Ratio).


In optimal conditions, the debt helps to increase the value of funds in the fund, or to achieve a better property. It can often be used to cover the fund’s income, for example in a situation where investors invest half new pensions, not how much the fund has paid, and the fund has a purchase in progress.

With the debt, however, the investor’s risk increases. Debts are first linked to real estate, and in extreme cases, real estate could be lost and lost to the benefit of the restoring institutions. Likewise, if the level is bad, I have extra years of costs that will degrade the fund’s performance.

5.Property type

Each property type has specific properties. For example, industrial halls usually have revenues, but again they are adapted to the needs of a specific company, and if this company terminates, a new refuge will be sought.

On the other hand, office space can usually be easily adapted to the needs of a new tenant, and its appearance will not be as much nron, but at the same time, offices do not generate such income.

A similar residential residence, which is usually not in classic real estate funds, is relatively risky from the landlord’s point of view, because the tenant protects the civilian end, and the owner often pulls the short end of the rope in many disputes. On the other hand, in the event that you rent the premises of a company, the two entities are built equally. So you can look for either a fund that has more than one type of real estate in its portfolio, or to divide your investment among several funds, each of which will focus on another segment of the real estate market.

Investment value kols

When we know what to confuse when comparing individual funds, we must have the most important thing that clients of real estate funds should understand. Real estate is an asset like kad jin and its value is kols. Most owners, who buy an apartment as an investment, do not know its value at all. Know only the purchase price and as long as you own the property, as a rule, do not give regular experts about the security. even with the impression that the value only increases.

The thorn price will then be known and when they decide to sell the property. they are often unpleasantly surprised that it will not work, not for how much dm and apartment they shared.

On the other hand, the funds have all real estate taken care of at regular intervals by a board of experts, usually both on the part of the company’s investments and the deposit that has reached the fund. Which means that the value of the fund can fluctuate up and down. This will happen to you when events occur in the market with the potential to negatively affect the economy. Such an example from abroad in recent years was, for example, a vote in the UK on Brexit, which also affected the value of assets of many real estate funds there. The example of the economic crisis is manifesting itself in a similar way, when companies are starting to approach budget cuts, especially in the subtle area, when they will find a modest share and the like.

If the price of the property is borne, for example, due to the accident and severe damage to the element, then it is usually only temporary cash. Therefore, when we adhere to the recommended investment horizon, we should continue to temporarily fluctuate the value of the fund. In the Czech Republic, we have only one experience with the breeding fund in the crisis period (but even more so, because it was the first about the real estate crisis). The Reico fund from esk spoitelna, which drank about 14 percent of its value in 2009, passed through this experience.

So if you ask how much the value of a real estate fund can fall in the event of a crisis, it will probably be somewhere around this value. Smaller properties in smaller cities may fail more than real estate in large cities and may need to be adjusted accordingly.

On the other hand, the risk at around 20 percent is, in my view, still interesting compared to the average yields of around the percent that these funds are able to deliver. If we take the recommended investment horizon at the level of about 5 years (but also more), then the client should not be on it, not at the expense of the investment, even without guarantees. And when he succeeds, I will be rich in these 20 percent after five years.