Investing In Commercial Properties In 2020: A Good Idea?
2019 was great for commercial real estate, owing to the office and co-living spaces. But will 2020 be the same? Many market pundits and reports believe so.
The CBRE’s 2020 US Outlook predicts that this is going to be a “very good” year for commercial real estate. Another report from Deloitte Center for Financial Services made similar forecast, adding that the mantra for commercial real estate investment companies, this year, will go from “location, information, analytics” to “location, experience, analytics”.
So, if you’re a real estate investor, the commercial sector is definitely something you should explore this year.
Of course, commercial properties, contrary to the popular notion, are far from fool-proof. There are several risks on the way. Moreover, they aren’t always suitable for all. For instance, often, the new investors can’t spare that big of a sum. Even when they are working with top proper investment companies to pool funds with other investors, they would still face financial constraints on many ends.
But on the other hand, if you are to build a high-value portfolio, commercial properties are the best bet, aside from investment in government projects.
It has benefits in aplenty. For the starters, commercial real estate has higher income potential. The large space holds a greater number of tenants, which assures a higher annual return. To that, through effective leveraging, you can further boost its cash flow. These properties also have a much higher appreciation value.
In addition, commercial properties have a security advantage. Even when the at-large economic condition looks bleak, the commercial business happening in the property is unlikely to dwindle; even if it does, there are too many takers already.
There are countless such benefits of commercial real estate investing in USA and even outside the country. Dubai, for example, remains a hotbed for property investors.
With all these benefits in line, and the market condition adequate, don’t let the opportunities slip by this year. Weigh-up your portfolio’s value by investing in commercial properties in 2020.