Many investors choose to invest in a property fund in addition, or as an alternative, to direct property investment.
Property funds principally offer investors an ‘armchair investment’ which benefits investors who do not want to spend any time building or managing their property portfolio. Property funds enable a greater degree of diversification for the majority of individual investor property portfolios as they have the ability to invest across a large number of properties that differ in asset class e.g. commercial and residential; price; build type and location.
Although the principle criteria for residential buy-to-let property finance is the property and not the individual; property investors who have a poor credit record or who are aged 70 years old and over will be restricted in their financing options. A property fund does not suffer from such issues.
For many property investors it is a matter of preference whether to have direct control over their investment; delegate investment to a property fund; or have a balance with some direct investment and some indirect investment via a property fund.