4 Real Estate Funds To Play In 2019

In the U.S., rising wages, in particular, and steady job openings have resulted in increased demand for land ownership in the metropolitan areas. These areas have witnessed a surge in housing demand.

Taking a closer look at the current scenario, the housing industry is actually reeling under extreme paucity of skilled labor amid rising prices of materials. But such factors are expected to wither away soon. After all, hiring boom in construction sheds light on the fact that such impediments would not last long. Under such circumstances, investing in real estate mutual funds seems prudent.

Staggering Amount of Investor Dry Powder to Target Real Estate

A lot of proptech startups aiming to tap the real estate market have been established lately. Such startups assist the real estate companies by improving the transaction process, easing the hassles involved with construction and providing newer methods of financing real estate projects. The crowdfunding legislations in 2012 and 2015 have provided the required stimulus for the growth of these startups.

Talking about real estate funding, venture capitalist and private equity investors had poured in about $5.2 billion in real estate startups by the end of 2018. Further, acquisitions and indirect funding have also been pivotal in shaping up the space of late. Moreover, angel investors are interested now, more than ever, to tap the space by investing liquid cash in real estate startups. As a matter of fact, approximately $226 billion is expected to be invested in real estate in 2019.

Opportunity Zones to Eliminate Capital Gain Taxes

Opportunity Zones, which were created as part of the 2017 Tax Cuts and Job Act, would go a long way in boosting the real estate market this year. As part of the arrangement, every U.S. governor earmarked 25% of the low-to-moderate income areas in their respective states. Such areas would then be converted to places where instead of paying capital gains’ taxes to the IRS, the amount would be deferred, reduced or eliminated as a whole.

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