THINKING ABOUT INVESTING IN
COMMERCIAL REAL ESTATE?
Why commercial real estate?
Simply put, commercial real estate lies at the balance point of risk and reward. In general, it is less risky than the volatile stock market and yields a greater return than bonds. The market seldom moves quickly, and lease terms can last for decades. While it's difficult (if not impossible) to move a 3-story office building, CRE is more flexible than you might think. For example, office properties can be repurposed to a residential use, or industrial changed to recreation.
An investment in CRE allows your money to grow as your property increases in value, while also providing regular cash-flow in the form of rent. There are also numerous tax advantages to investing in real estate, such as depreciation and the 1031 Exchange program, which allows for deferment of Capital Gains Taxes.
When these benefits combine (don't forget the leverage you gain from bank financing), you're left with one of the most versatile investments money can buy.
So what are the risks?
Several - we won't sugarcoat it. Real estate is not a liquid asset. With increased rewards comes the risk that you won't be able to sell the property when you want to, or that the value decreases. A tenant might vacate, leaving you with empty space (we can help with that!), or there might be a downturn in the market. New properties might come online nearby, creating competition where you didn't expect.
RYER strives to minimize risks where possible and inform you of the rest. At the end of the day, it's your money and your decision to make. Our job is to ensure your decision is well-informed. We hope you'll get in touch to see if investing in CRE is right for you.
Need a glossary of CRE terms? Click here for a great resource!