personal-finance
How do real-estate mutual funds work?
Dec 27, 04:12

Real-estate mutual funds (MF) offer investors a chance to own real estate and earn rental income from them, without actually having to own any property. These MFs invest your money in real-estate investment trust (REITs). A REIT is simply a vehicle that owns properties. These are rented out to offices, cineplexes, industrial parks, hotels, senior living centres and so on, from which they earn a steady, rental income. A basket of such REITs, holding real estate abroad, held by your MF ensures diversification across geographies and sectors. Domestic REITs (listed on stock exchanges) are largely focused on office space.

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