Bricks without the headaches

The appeal is easy to understand. Real estate is tangible. You can see it, touch it, drive past it and know exactly what you own. No abstract charts, just a building with tenants inside.

And perhaps even more importantly, you’re in control. You choose the asset, set the rent and decide when improvements are made. For entrepreneurs who have spent their lives making decisions, that sense of control feels both familiar and reassuring.

There is nothing wrong with that. Until you start adding up the true cost.

To put that into perspective: on a €1 million property, transfer tax alone amounts to €104,000. Before you’ve collected a single euro in rent, your investment starts at a deficit. Those costs need to be earned back first.

Selling the property later is no easier. Real estate isn’t something you can liquidate overnight. Finding a buyer may take months, negotiations can drag on, and transaction costs return once again. Until a sale is completed, your capital remains tied up in a single asset.

One location. One roof. Often one tenant.

If that tenant leaves, your income doesn’t decline gradually. It can drop to zero overnight, while costs continue. The situation is not unlike putting your entire stock portfolio into a single company.

Diversification in real estate serves the same purpose as diversification in any investment portfolio: it helps reduce risk without necessarily sacrificing returns. With only one property, that diversification simply isn’t there.

Owning a property means dealing with an endless stream of responsibilities that rarely appear in the sales brochure. Maintenance needs to be scheduled. Tenants have questions. Vacancies need to be filled. Payments must be monitored. Insurance policies, valuations and legal paperwork all demand attention.

And another challenge has emerged in recent years. Sustainability regulations continue to evolve, and improving the energy performance of a building can require substantial additional investment. When you own a single property, that responsibility rests entirely on your shoulders.

For most entrepreneurs, time is the scarcest resource of all. Managing real estate yourself consumes exactly that.

This is where the story changes.When you invest through a real estate fund, you’re not buying a single building. You’re buying a stake in a broader portfolio. The same underlying asset class, without many of the day-to-day concerns that come with direct ownership.At Benkey, this means diversification across multiple properties, sectors, locations and tenants. If one tenant leaves, the impact on the overall portfolio is limited. Rather than experiencing a major setback, you’re more likely to feel a ripple.

The operational side is handled by a team of real estate, asset management and financial professionals, allowing investors to benefit from real estate exposure while keeping their time focused elsewhere.

Scale also creates opportunities. The fund operates in the mid-cap segment, which is often inaccessible for individual investors. It can negotiate more favourable purchasing and financing terms, and investors do not need to pay transfer tax on an entire property acquisition themselves when entering the fund.

The strategy is supported by several layers of risk management, including a conservative financing policy of no more than 75% debt per property, independent valuations by NRVT and RICS-certified valuers, oversight from an investment committee and supervision by the Dutch Authority for the Financial Markets (AFM).

Leverage can enhance returns, but it can also amplify losses when markets move in the wrong direction. That is simply part of investing, and it’s important to acknowledge it openly.

Want to learn more?
In the podcast Over Stenen Gesproken, we explain in just ten minutes how the Benkey Real Estate Fund works. Topics include diversification, risk and return, acquisition strategy and the importance of having skin in the game. It’s an accessible introduction for anyone interested in understanding how investing through a fund compares to owning real estate directly.

Still, compared to the process of selling an individual property, the difference is significant. While a property sale may take months to complete, periodic trading opportunities provide a considerably higher degree of flexibility. Eight trading moments a year is far from day trading, but it’s also very different from being tied to a single building.

Investing through a fund offers diversification, scale and peace of mind, while requiring you to give up some of that direct control.

There is no universally right answer. There is, however, an honest question worth asking:

Do you want to own real estate, or do you want to manage it?

Because those are two very different things.

And don’t forget the broader lesson of diversification. Real estate can be a valuable pillar within a wealth strategy, but it should rarely be the only one. Whether you invest directly or through a fund, it should sit alongside other investments and sources of wealth.

The entrepreneur wants control. The investor wants the outcome.

Real estate without the headaches is where those two meet.

If you’d like to learn more about the possibilities, feel free to contact us for a no-obligation conversation.