Indirect investment, how is it different?
Then there are indirect investments. While they seem to offer a more reliable concept, they remain flawed in multiple aspects.
Why? Well, simply because such an investment isn’t made in growth-oriented property. It’s made towards an investment trust or real estate fund. own.
Here’s how it works:
- It starts with a company, the “Real Estate Trust or Fund.” They own multiple properties and are always seeking to buy more in order to increase their value.
- In order to purchase these additional properties, they need investors, people like ourselves. Investing in this company will allow you to get some passive income. The company decides on how much you get in return for your investment.
- With the money from investments, the company purchases more properties and becomes more valuable.
As you can see, the company has the ultimate decision in how much you’ll generate from your investment. There are many reasons for that, but it’s primarily because they take care of the maintenance and all the other aspects of the properties. You just get the returns.
But the important part to consider: Getting a high number of investors allows this company to purchase more income properties, growing their own value.
The fact that the company is gaining in value has no impact
on your returns.
When you participate in indirect investing, you’re investing in companies, not properties. Yes, those companies’ objective is aimed at financial growth, but not yours – it’s their own.
These means of real estate investing have been around for a long time. But, given their high premiums, they rarely ever meet consumer demand where it stands. Many are simply unrealistic for the average consumer to invest in.
That’s why we decided to change that at CROWDLITOKEN.
Now that you’re clear on what has already been around for a while, let’s explore what it means to “tokenize” some real estate and how the CRT is changing the world of investing.