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indirect property QB4

R

rajashri

Member
in question 4.3 of QB4 solution on page 4
a point mentioned is

Indirect property would be more suitable investment if property exposure is desired .

Can u give some examples or what is meant by this sentence ?
 
An example would be investing in a unit-trust or fund which invests in property rather than buying property directly.
 
The general advantages of indirect property investment are:

  • you get the benefits of investing in property, eg diversification from equities, higher(?) return than bonds etc
  • divisibility (investing indirectly allows you to invest/divest smaller amounts at a time, ie not a whole property at a time
  • diversification among properties as the fund/ property company holds many more properties than you can manage yourself and you have a small exposure to each
  • indirect property should be more marketable (eg could sell within agreed timefram which could be immediately up to a limit or say a month. With direct investment it would take a lot longer to find a buyer and then to actually process the transfer.
  • other advantages of indirect investment, eg benefit of expert manager etc

That should be enough to get you started.
 
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