The guidelines for mutual funds real estate’s welcomes, which had been in the works for long. This not only helps the investors to invest a part of their resources to the real estate but it also helps the potential to reform in the investors or poorly regulated or unfavorable market. It will also be kindness to the possessions financing marketplaces where this will help to invest in mortgage securities and shares; it is also associated with real estate.But if the regulation is poor and the organized market for real estate news is absence in launching than the ongoing existence of such mutual funds will be a challenging task. The bad position of the Indian property market is well known. But the true value of the property is never known, as the liquidity is low where most of the transaction involved payment in Black.
High stamp duties play a big role in stopping buyers of the property and sellers from announcing the true value transaction of the property. Cities are poorly planned and the regulations are poorly enforced resulting in the increase of property that is either partially or completely unauthorized. Investment in properties legal standing can be a big risk for such funds.
The shortage of an organized market likely to hit the regulation funds. While there is a daily declaration of NAV, it is not clear that how the funds would determine the daily value of the physical property reviews
However regulatory has done a great thing by recommending a close-ended structure for these funds. Considering the current state of the underlying market and the long period of the funds is the right way to go for a close finished structure. While semi will also play a good role for introducing commodity based mutual funds. The small investors get an opportunity to diversify their investments in the mutual funds that invest in diverse asset classes.