Key Differences Between Commercial Real Estate and Other Investments
Investing for the future is not a one-size-fits-all formula. Just like salsa, individual risk tolerance can range from mild to super spicy! But just like tomatoes should appear in every salsa recipe, there is also one thing that should appear in every investor’s portfolio: diversification.
So, when considering a diversified investment portfolio, most people look at multiple types of investments; things like stocks, bonds and other alternatives. Commercial real estate is one such alternative.
Commercial Real Estate as an Investment
Here at Residential to Commercial Academy, commercial real estate is in our blood. We come from a long line of commercial investors. We’ve learned this industry from the inside out and sat on both sides of the transaction table. Multi-family, commercial, developing, investing and real estate law; we’ve done it all. As attorneys who work in the real estate arena, we have a few lifetimes worth of real estate experience under our collective belt.
But we’re also regular people with families, responsibilities and the need to plan for the future. We understand that preparing for retirement can seem daunting when you’re in the trenches of raising a family, trying to balance work-life and home-life, planning for the future while still living in the moment.
But it can be done. How do we know? Because we’ve done it. We’re doing it every day. And you can do it, too! One step at a time.
Three Great Reasons to Invest in Commercial Real Estate
Here are our top, easy-to-understand, tried and tested reasons to consider investing in commercial real estate as part of your investment portfolio.
Diversification minimizes risk.
Adding real estate to your investment portfolio can help diversify your investments away from the stock market. Commercial real estate deals also target longer holding periods; often five or more years, which means they aren’t subject to the same daily ups and downs of stocks.
Cash flow potential.
Commercial real estate investing can generate both short-term and long-term returns for investors. Some types of commercial properties generate monthly or quarterly dividends for investors through things like rent payments.
This means the appreciation of real assets. Commercial real estate properties can increase in value for many reasons; location, amenities and the potential increase in rental income. For many commercial real estate investors, the windfall comes when their investment exits or is fully realized, meaning the property is sold or refinanced for more than it cost to build/upgrade.
Get Started in Commercial Real Estate Investing
All successful journeys begin with a solid plan. Our online course, Residential to Commercial Academy, will give you all the tools you need to make sure every property that you buy, sell, hold or invest in is lucrative and successful. It has everything you need to know to make the smartest commercial real estate deals possible.
Ready to get started in diversifying your investment portfolio? Preview the course material here.