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The benefits of investing in commercial real estate

On Behalf of | Apr 3, 2018 | Commercial Real Estate |

Higher interest rates and increased volatility in the stock market may signal the beginning of the end to the current bull run. Therefore, some analysts suggest that California entrepreneurs should reduce exposure to stocks and put their money into other investment classes. One potential investment alternative is the commercial real estate debt and equities markets within the United States. Doing so could provide stable returns while providing income at the same time.

Those who want to invest in the commercial market could do so by purchasing equity or debt. Investors could choose to buy shares in an exchange-traded fund or decide to buy a property. Investing in debt backed by a commercial property can be an effective way to obtain consistent returns with less volatility on a daily basis. Once an investor has decided to buy debt or equity, it is time to find a market that offers sufficient returns at a reasonable level of risk.

While many investors may look to large cities like Los Angeles, there can be opportunities in adjacent communities such as Orange County. Looking at suburban or surrounding areas that are less developed offers an opportunity to invest at lower prices. Regardless of where a person invests, it should be an area that he or she has an understanding of.

Buying office buildings, retail locations or other commercial properties may offer investors stable returns over the long-term. However, those looking to invest could benefit from an understanding of local market conditions. An attorney could look into any zoning or title issues that might hamper a client’s ability to maximize returns on a commercial real estate investment.