Benefits Of Investing In A Mutual Fund Trust Rather Than Investing In Real Estate By Yourself

When you find yourself with some additional funds and want to place those funds towards investing, you have several options. Each option comes with its own capital requirements, risk management and, ultimately, the efforts needed to get the returns. For those that are new to investing, there seem to be two safer and more traditional methods of investment. These are either a mutual fund trust or expanding your real estate into investments.

Why Real Estate By Yourself May Not Be A Great Start

The first issue that comes up with real estate investment is the large initial investment capital that is needed. When you're purchasing real estate by yourself, especially your secondary investment property, you'll still need to place a down payment on that home. On top of that, you're going to need the ability to qualify for financing, which means taking on debt to pay off the investment.

Also, how strong is your overall knowledge of the real estate market? Are you fully understanding the zoning process and developing a property? Are you ready and committed to becoming a landlord and the continuous management of the property itself? This can effectively end up becoming a secondary position for many. While the returns eventually can be quite consistent and almost considered similar to a fixed income, that is a long road to take.

How A Mutual Fund Trust Is A Better Option At The Start

With a mutual fund trust, there are lower capital requirements to get started. Those are immediately invested into the objective of the fund, and there's no financing or debt to get into. Plus, since a professional management team manages mutual fund trusts, they can handle risk management through diversification, and there's a streamlined and convenient administration.

Finally, the more creative mutual fund trusts provide opportunities for investments that may not otherwise be accessible to investors. Whether it’s predevelopment real estate opportunities or putting into investments that pay out monthly dividends and returns, it’s all much simpler through a mutual trust fund.

That's because there's accountability and fairness to investors through industry regulation and transparency. They are required by law to ensure that they are working in your best interest with your funds while also focused on a specific sector or industry.

In The End

Self-directed investing in real estate is the harder route. Those mistakes and experiences you get along the way usually equate to money spent or money lost. Instead, you can work with your hard-earned money and watch it grow, have all the heavy lifting of choosing what to invest in go away, and simply collect those capital gains and dividends as they come your way.

Interested in growing your investments through real estate investing? Reach out to us and let’s start compounding your money.