Real Estate and Finance Investment

Real Estate and Finance Investment

Most of the real estate finance activity tie around resales, financing and leasing of existing properties. In most cases they do come with investments developments such as;

*Land preparation with an aim of reselling sites to project developers

*Single or large scale project development on a single site

*Development of mixed projects like shopping malls

For this activities to come to life a huge financing during the construction and development phase is required and even a permanent financing after improvements have been made and the properties are leased to tenants.

One don’t only need to have a solid foundation in analyzing the techniques as the cornerstone of understanding finance and investments in real estate, he/she also needs the knowledge of the institutions that make real estate, loans and investments. Savings and loan associations, commercial banks and life insurance companies are just few examples of the institutions involved.

Although some of these institutions are intermediaries like banks and savings and loan associations, they still operate by accepting deposits from savers and still make loans on real estate. Even pension funds often do provide funds for investments in real estate.

A fact is that almost every entity tend to specialize in various aspects of real estate finance with each operating under certain legal regulations. Different institutions plays different roles in various kinds of real estate transactions; but with the tremendous growth of real eta investment trust has brought about the most significant changes in the financing of real estate.

A real estate investment trust is a real estate company or trust that has selected to qualify under certain tax provisions to become a pass through entity that distributes to it’s shareholders substantially all of it’s earnings in addition to any capital gains generated from the sale of disposition of it’s properties for a company or trust it must have at least 75 percent of the value of REITs asset, cash and government securities.

Real estate is an important component of an multiasset portfolio that may also include stocks ,bonds and other investments. As evident as it is ownership of must physical assets is drained by the virtue of possession i.e. furniture, jewelry etc. which is not the same case for real estate investment for it is where ownership can be quite different from possession.


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