Real estate (NT) remains the favorite investment of Lithuanian residents. However, not everyone has enough funds to purchase an apartment or other object intended for rent. In this case, there is an opportunity to invest in real estate funds. However, the question arises – where is it more profitable to invest: buying and renting an apartment or investing in a real estate fund? Andrius Uždavinys, head of the investment management company “Eika Asset Management” (EAM), answers these and other questions for investors.
First of all, he points out that it is impossible to answer unequivocally how much money you need to have in order to invest in a real estate fund.
You don’t always need 125,000 euros
According to the data of the Bank of Lithuania, there are 110 investment funds in the country that are classified as real estate funds. Most of them are established and operate under the Law on Collective Investment Entities for Informed Investors (IISKISĮ). It provides that professional investors or private investors who undertake to invest at least 125,000 euros can invest. However, the law provides for exceptions. For professional investors and investors who have passed an additional suitability assessment, the minimum investment amount can be significantly lower. In such cases, it is determined by the rules of a specific fund, and it can reach several tens of thousands of euros.
A. Ozdaviny draws attention to the fact that among the mentioned 110 real estate investment funds there are several that were established under the Law on Collective Investment Entities, which is also intended for non-professional investors, and the minimum investment amount is determined by the manager and can be from several euros. If the units of such a real estate fund are traded on the stock exchange, the minimum investment amount is usually the price of one share on that day.
Forecasts funds for small
“It can be difficult for a less experienced investor to choose a specific fund, so one way to not get lost is to choose a financial advisor or fund manager with a strong reputation and a track record of performance. We see that investment managers are increasingly focusing on small investors, so it is likely that more products for them will appear on the market in the coming years,” says the head of EAM.
According to him, investment funds managed by commercial banks are already available to small investors, where both the investment amount is lower and the liquidity is quite high.
“The real estate fund is not always the most suitable instrument for small investors due to its specifics. Investments in real estate require a longer investment horizon, “locks up” money for a longer period of time and does not provide the opportunity to withdraw from the fund before its end. On the other hand, it is precisely the longer period that allows us to utilize all the value created by real estate and potentially generate a higher return”, – A. Ozadavinys puts the pluses and minuses together.
The return is 2 times higher
According to him, many investor readers of Invest magazine have already apparently tried both crowdfunding and bonds.
“What makes investing in real estate funds interesting and different from them? I would mention several key differences: return, risk, liquidity and investment period,” emphasizes the head of EAM. “Usually, crowdfunding and bond products offer a predetermined fixed return and the investor will not earn more than the forecast. Mutual funds provide investors with a target return, but fund managers are interested in exceeding it. When investors earn more, more the fund manager also earns, because part of the reward often depends on the results achieved.”
Another difference is the assessment of investment risk. As crowdfunding and bond products are often more specific, it is easier to assess the risk and compare it to the return offered to make a decision. When investing in real estate funds, especially at the beginning of their activity, when the entire investment portfolio has not yet been formed, the investor needs to delve into the fund’s strategy and documentation.
Finally, the liquidity and duration of the investment. Alternatives to crowdfunding or bonds are often more liquid and have shorter maturities of 12-24 months. If the bond issue is listed, its instant liquidity is ensured, crowdfunding platforms often have secondary markets. The majority of real estate investment funds “lock up” investors’ money for a longer period of at least 5 years.
A. The task also provides the EAM team’s calculations of the potential return on investing 100,000 euros in a purchased rental apartment and real estate fund.
“Based on long-term market trends and assuming 3% annual condo appreciation and 5% rental income, with a 50% loan, the return would be about 65% over 6 years, net of taxes, repairs, or broker fees. A multi-family development investment fund that reinvests returns could earn double that over 6 years, about 130% return after management and success.” Of course, the risk is higher, but EIKA has a lot of experience,” the head of EAM emphasizes.
“Investuok” magazine, 2026 July-August.