If you’ve been considering what type of investment opportunities may be available in the real estate realm, commercial real estate is an avenue you MUST explore. Commercial real estate investments can provide a stable, low-volatility method for multiplying wealth, diversifying your portfolio while increasing passive income streams for the investor.
You may also consider investing through a commercial real estate fund when you want the most security, asset appreciation, and long-term passive income. Let’s explore seven reasons to invest in commercial real estate, and whether or not a real estate fund is your best option in this exciting investment space.
Let’s begin by defining what types of properties commercial real estate investment typically includes. Essentially, commercial real estate is space that’s leased out for business purposes rather than residential purposes, with apartment complexes being an exception. Five common categories make up the vast majority of commercial real estate—what are they?
When talking about commercial real estate to invest in, five common property types make up the majority of portfolios. Each commercial property type has unique factors that are more or less attractive for real estate investors.
The Five most common categories of commercial real estate include:
Investing in commercial real estate is one of the most secure methods for increasing wealth over the long term, especially when the commercial real estate is bought within a portfolio that has been carefully vetted based on a stringent set of criteria and exacting financial standards.
While commercial real estate funds can mitigate risk and provide more income stability, finding the right commercial real estate fund for your investment goals is crucial. Always be sure to get a solid grasp on the ways a commercial real estate investment fund chooses its properties.
With proper due diligence and the expert help of a commercial real estate fund like Saint Investment Group, you can enjoy numerous investment advantages. Let’s cover seven of these advantages to discover whether or not commercial real estate investing meets your objectives.
One of the leading benefits of investing in commercial real estate is passive income. Similar to stock dividends, commercial real estate funds pay regular distributions to investors, either monthly, quarterly or annually. In general, these distributions are often higher than those for stocks, providing measurable passive income that can be reinvested. Additionally, many investors use this income for their retirement, as well as supplementing their main source of income with another income stream.
Today is one of the best times to invest in commercial real estate, with strong growth being seen in the sector, especially when it comes to properties like apartment complexes, as housing purchases have become less common with younger generations. Industrial properties have also seen impressive growth, as more and more people are switching to online retail for the majority of their purchases. Real estate funds give you the opportunity to invest in large-scale commercial real estate opportunities like these; opportunities that most individuals would not be able to afford or have access to on their own!
Fortunately, there are ways to invest in commercial real estate without having to shoulder the burden of being a landlord. Real estate investment trusts (REITs) have been an investment option for some time, and now real estate investment funds like Saint Investment Group are improving on this model with more in-depth reporting, better returns, and greater transparency. If you’d like to learn more, or have any questions, feel free to reach out to us!
Unlike investments like stocks, bonds, or mutual funds, investing in commercial real estate provides you with the security of investing in a tangible asset. One unfortunate reality of investing in the stock market is that it’s possible for shares in companies to LITERALLY go to zero value. And you won’t be able to have any say in it!. Conversely, a commercial real estate investment is backed by the tangible land and building that comprises the commercial property, protecting your investment capital in something REAL. The possibility of a property going to zero is extremely unlikely, which gives the investor some major comfort in their investment decision.
As the debt on commercial properties is paid down with the rental incomes each month, the leverage on the asset is reduced, increasing equity every month for the investor until the exit. If you mix the pay down of the debt, with a property that is appreciating in a thriving market, you likely have a VERY successful opportunity for investors!
When the economy grows because of people earning more money, the prices for renting commercial space go up as well. Because rents typically rise in tandem with inflation, your investment is likely hedged against inflation for greater returns over the long term. For example, the Federal Reserve Bank of St. Louis reported a 5% increase in commercial real estate prices each quarter from 2012 to 2016, but during this same period, the Consumer Price Index increased by only 2%. In this case, property values rose much faster than inflation, all while receiving income at the same time.
Keeping all of your investment capital locked up in stocks alone is never a safe strategy. Finding diverse ways to spread risk across your portfolio of investments is the wisest method for protecting and growing wealth. Commercial real estate provides one of the most secure, stable ways to diversify your investment portfolio while earning passive income and enjoying solid returns at the same time.
Remember, commercial real estate can be safer than stocks, but choosing your investments wisely is always critical. There are countless factors that may affect the overall performance of your real estate investment and are important to consider. Saint’s commercial real estate funds managed by our professional group of seasoned operators in Saint Investment Group help lower your risks when getting diversified into the commercial real estate sector.
The Saint Investment Group team are experts in commercial property deals, and we thoroughly scrutinize every property we select for investment, providing greater security for your investment in commercial real estate. Call us today to learn more about diversifying your portfolio with our commercial real estate fund, and adding a stream of safe, secure, stable income. Saint Investment Group makes investing in commercial properties painless and predictable so you can focus on living your life instead of worrying about your capital.
Call (323) 483-0291 and learn how you can capitalize on our expert team in commercial real estate!
When you want an expert team of commercial real estate analysts reviewing every deal you invest in, combined with detailed reporting on performance, Saint Investment Group is here to help you get started investing. Call (323) 483-0291 today to start your investment journey.
A master in Investment, Marketing, and Capital Raising.
Nic has honed his focus on the Real Estate and debt markets with Saint Investment Group and pursues large-scale Distressed Asset purchases with his partners and syndications.