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When you consider investing in commercial real estate, you should consider the time
period in which you would like to tie up your money. In many cases, our clients come to
us and really are looking for a short-term investment in commercial real estate, and
those are hard to find and generally apply to some of the more value added or opportunistic
views.
But a conservative investment strategy is one that looks long term. If you realize what
has occurred in this most recent economic cycle, those properties that have been held
and who are conservatively financed and have been able to make it through the cycle are
now moving back towards more normalized values.
So the longer that you hold onto a piece of commercial real estate, the greater chance
that you have of success. Also, if you think about the fact that real estate generally
generates yield, six or seven percent cash flow over a hold period certainly takes a
significant amount of risk off the table relative to the overall investment that you've just
made.
So investing with a long-term view in commercial real estate is a core strategy that can generate
the kinds of returns that you're looking for in this asset class.
To get the whole series of 26 one-minute videos that answer your most important questions
about commercial real estate, visit TheHeritageGroup.com/Tips.