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Getting a handle on the real estate market

On Behalf of | Mar 14, 2018 | Commercial Real Estate |

According to Collier International, 2017 was the peak for the U.S. commercial real estate market. However, it is likely that growth will continue into 2018 and beyond. California residents and others who are investing in commercial properties may be able to earn a positive return on their capital. Over the past 20 years, the average return has been 10.1 percent per year. However, it is thought that the average return will be about 6 percent in 2018 and 2019.

One of the benefits of buying and selling real estate is that it is not a liquid asset. Therefore, it may take more time for purchase or sale to be completed. This can work to force an investor to think about whether he or she really wants to buy or sell before making the move, in turn helping prevent a commercial real estate owner from trying to time a market high or low.

As a practical matter, timing a high or low is almost impossible. This means that an investor needs to have a clear strategy and look for investment products that meet his or her goals and investment objectives. As real estate is usually not correlated to the stock market, prices may not be as volatile even during times of stock market rallies or corrections.

Buying a commercial property may be an ideal way to make a profit in almost any market. However, investors may want to do research into any building that they want to buy ahead of time. Doing so might help them determine the specific risks and rewards that may be incurred by making an investment. An attorney may be able to help an investor review a purchase agreement or help to draft one prior to closing a deal.