Do you want to invest in real estate without dealing with property management? One option to consider is investing in a real estate portfolio fund. Real estate investor Patrick Carroll understands the benefits of diversifying real estate holdings while leaving the day-to-day operations to professional management teams. By investing in a portfolio fund, you can reap the financial rewards of real estate without the hassle of direct property maintenance.
How It Works
Real estate investment funds acquire properties across the country and then make targeted improvements. By renovating these properties in stages, they increase their value and enhance tenant satisfaction. These funds can focus on different types of properties, such as multifamily housing, shopping centers, office buildings, retail spaces, or a combination of property types.
Multifamily Real Estate Fund Example
For example, the Hawthorne Portfolio consisted of 903 units in cities like Atlanta, Charlotte, and Nashville, purchased in 2019. ARIUM property management spearheaded $1.8 million in renovations to the properties, leading to a 10.5% increase in lease growth. When the portfolio was sold in 2021, it achieved a gross internal rate of return of 54%, providing significant profits to the investors through both rental income and the sale of the portfolio.
Benefits of Real Estate Investment Funds
Investing in a real estate fund is similar to buying stock, making it accessible without requiring a large upfront cash investment or a loan. It also removes the burdens of property upkeep and tenant management, challenges often faced by direct property owners. In addition, this type of investment fund is reported similarly to other investments, so it doesn’t bring significant changes to how you file taxes.
Finding Dependable Real Estate Investment Funds
According to Forbes, consulting a financial advisor or retirement plan representative is a smart way to start exploring real estate investment funds. Many top-tier funds are available through these professionals. If you prefer to do your own research, look for funds that allow individual investors to buy in and have competitive expense ratios.
By investing in a well-managed real estate portfolio, you can earn dividends from rental income and benefit from potential gains at the sale of the portfolio, without needing to directly purchase or manage properties. Real estate investors like Patrick Carroll leverage this strategy to grow their wealth while relying on professional management to oversee the day-to-day operations.
