Why invest in Real Estate?
Real Estate investment has successfully overcome all the economic ups and downs in history and has proved to be an excellent value safeguard in times of crisis. Investing in the Real Estate market is a traditional, low risk and low volatility option.
What are the advantages against other investment options?
- It allows for long-term, constant, and safe asset growth.
- It may cater to the needs of different investors’ profiles, making it possible to be a part in projects with different levels of exposure, rates and terms.
What are the disadvantages against other investment options?
Real Estate investments are not liquid, and they cannot be made cash or realized in a short period of time, since that would imply an important profitability decrease.
What are the risks the Real Estate investor faces?
As with any other investment, the Real Estate market is affected by the evolution of the local, regional and world economy and, even though it is not as volatile as the rest, it can have ups and downs. However, crises may also pose new investment opportunities.
Our geographical spread cooperates in reducing risk. It also allows us to identify more opportunities, create synergies across countries and distribute know-how and people among projects and markets.
What is the return on investment?
Rates may vary according to the type of portfolio you are investing in. Typically, investing in rent portfolios offers lower risk, where the stabilized return on investment has historically been between 6 and 12% annually, in mixed portfolios (rent plus capitalization) the return may be between 9 and 14%; and, in capitalization projects, they may widely exceed these percentages.
As markets may go through highly positive or highly negative periods, these rates may vary sharply. In any case, historical returns must not be interpreted as constant parameters or as a reliable forecast.
Under which legal figure is the investment made?
It depends on the project and the country where the investment is placed. . En Uruguay, Paraguay and Perú the figure of corporation is typically used. In Argentina, the most widely used figure is that of trust, whereas in the USA, most projects are made as LLCs. (Limited Liability Companies )
Is the investment under my name or under VC’s name?
The investment is made under the investor’s name, who may be an individual or a legal person .
¿Puedo retirar mi dinero en cualquier momento?
Cualquier inversión realizada en el sector inmobiliario implica la inmovilidad del capital durante un determinado plazo. Este período puede ser más o menos prolongado de acuerdo con el plan de negocios del proyecto o a las condiciones del mercado. Esto no implica que el inversor no pueda retirarse antes del proyecto si esto fuera necesario, para lo cual deberá sacrificar los costos que ello implique en cada caso. Vitrium Capital cuenta con una amplia cartera de inversores individuales e institucionales. Esto le da al inversor más instrumentos para eventualmente lograr vender su participación a otros potenciales inversores que integren la misma cartera.
Can I withdraw my money at any moment?
Any investment made in the Real Estate business implies tying up capital for a certain period of time. This period can be more or less extended, depending on the project’s business plan or on the market conditions.
This does not mean that the investor cannot withdraw before the end of the project if necessary, but the costs – involved in each case – will be sacrificed.
Vitrium Capital has a large individual and institutional investors’ portfolio. This provides the investor with more tools to sell their participation to other prospective investors in the same portfolio.
Is the investment translated into fund shares?
It depends on the project and the legal structure used. The investment in specific projects is in the corporation or in the trust which has that sole project, not in a set of projects.
Which documents certify the investment made?
It depends on the legal structure of the project:
- In the case of trusts, investors receive a Certificate of Participation, which represents the rights they have over a certain part of the project.
- In the case of a corporation, the investor receives a title of Shares.
- In the case of projects developed abroad through partnerships or LLCs, the investor will receive a Certification for their participation as a shareholder in the project.
What is the legal support for the investor?
Investments are materialized in titles that certify the investor’s participation in each transaction. The most frequent real estate operations are made through:
i) diirect acquisition of property (property rights)
ii) participation in a Trust
iii) shares in those partnerships owners of the project
iv) the granting of mortgage loans on real estate properties (security right).
Are all the investments on projects to be developed?
Not necessarily. In the different investment portfolios that Vitrium Capital offers to investors, there are new projects to be built, and others already built on existing properties where the investor acquires already built real estate property (this usually occurs in projects for rent).
Do you develop “tailored” products?
We do, as in the case of land owners who, with or without Real Estate business experience, wish to participate in new projects, offering their land as a basis for the project.
On what information is the project selection based for Vitrium Capital’s portfolio?
Projects are selected after performing the necessary assessments for each case, as for instance, location, prospective market, return rates, risk, fund flow, investment terms, developer group’s background, etc.
How is Vitrium Capital’s proposal different from any realtor’s proposal?
Vitrium Capital develops projects in a comprehensive way, providing real estate advice and investment risk analysis. Even though realtors may in some cases act as business allies (bringing in the owner of the land where Vitrium Capital may develop and build a project), in most cases they are agents between property buyers and sellers.