Real Estate Investing is a Safe Way of Investment

by Sharon Rousseau Personal Blogger

Summary: The word real estate covers land and all the improvements that have been done on it- a building, a well, a shopping mall etc.

People tend to invest in real estate since they don't consider the stock market reliable. Real estate investment is thought to be a safer way of investment with lucrative potential for returns to reduce risk. Commercial real estate investing is being vehemently considered in recent times as an attractive avenue for investments.

Commercial investment implies investing in commercial property. Such properties include office buildings, warehouses, retail shops, storage houses etc. These fetch a substantial amount of revenue. They can easily be put on rent, and the lease for rent is generally for three years or more. So, for the years for which the lease is applicable, monthly revenue is fixed and would certainly reach the owner. Even selling off the property later would fetch the owner more money than he had initially ventured. Suppose you handle it carefully, like by renting property only to trustworthy people. In that case, commercial real estate investment can earn a stable, regular income.

A bit of research is needed on the commercial property that one is about to invest in. The worth of the property, the worth of the location, prospects of growth and development in the area, the electrical condition, plumbing, and the roof structure should be carefully scrutinized before anything is finalized. Discovery of such defects later would incur an extra expenditure in repairing these, which would prove very expensive.

The different types of commercial investment could be:

Investing in a commercial property in a group. If many people invest together, the risk involved in such investment diminishes. Besides, the initial cost is not too high, as in the case of individual investment.
Building a new commercial building demands the knowledge of the commercial codes.
Knowledge of building codes is needed when the plan is to renovate and refurbish an old commercial property and turn it into a new polished commercial real estate.
Renting the property on lease to a reliable renter would make sure of a regular cash inflow.

Another very important factor in achieving success in commercial real estate is that the area chosen should be put to use very judiciously. Putting up any property would not be lucrative. Such properties should be prepared, which has a demand in that particular area. The recent trend shows that people are looking for cheap space to make offices.

Growth, stability and high return are the few adjectives attached to commercial real estate investment. Investing in commercial real estate entitles the owner to regular rents or a large lump sum when sold later. Investment in a proper, desirable location is essential. People would not rent the property unless the area is safe; renting a property would benefit the renter. Even investing in a property that is gradually being developed is a good idea. The investment would be relatively low, but returns in a few years would be high.