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Investing in commercial real estate can be confusing to new investors—dizzying numbers and jargon can make investors wary. However, investing in commercial real estate is actually easier than you think—and the perks are great to boot. Sound income potential, solid stability, and downside protection against market volatility are some of those perks.
Investing in Commercial Real Estate Doesn’t Require You to Be an Expert
Investing in real estate doesn’t demand you be an expert in real estate This is where sponsors come in. And no, a sponsor isn’t an advertiser. A sponsor is an asset operator who syndicates the funds and makes the deal happen.The sponsor handles anything from funding to managing the investment. They manage the asset. You collect the income.
Commercial Real Estate is a Long-Term Investment
Another upside to investing in commercial real estate is its long-term focus. It protects your downside and is engineered to collect big returns over time. On the flip side, if you’re just looking to make quick buck, real estate might not be the right investment space for you. Plus your money’s locked up for a pre-set contractual period — you can’t just cash out anytime you want.
Crowdfunding Allows Everyday Folks to Own Commercial Property for Under $1000
The Jumpstart Our Business Startups (JOBS) Act, signed in 2012, allows everyday investors to own a piece of assets such as the World Trade Center through real estate crowdfunding. There are tons of online marketplaces that give you access to syndicated deals. And if you’re not into that? Well, there’s always REITs.
A version of this story appeared on WealthLAB.
Philip Michael
Philip Michael is an entrepreneur, real estate developer, and bestselling author of Real Estate Wealth Hacking: How To 10x Your Net Worth In 18 Months. Philip’s a former on-air host on SiriusXM and Fuse and current publisher of real estate/personal finance site WealthLAB.co
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