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The different ways to invest in real estate

On Behalf of | Nov 6, 2018 | Commercial Real Estate

Investing in Texas commercial real estate could offer unique opportunities for a portfolio. However, there are many different ways to invest. For instance, an individual could choose to be a private money lender. This involves giving money to developers and others who wish to make use of land or existing commercial buildings. It is also possible to purchase a building or a portion of a building. This enables an investor to find tenants and take other steps to maximize return on investment.

One can also indirectly invest in commercial property by purchasing shares in a real estate investment trust (REIT). With this type of investment, one is entitled to a share of any profits generated from the property. As with private money lending, a REIT is generally considered a passive form of investment.

One of the benefits of gaining exposure to commercial real estate is that prices are stable over longer periods of time. This is because the commercial market is larger than the residential market. In addition, commercial tenants tend to sign longer leases, which keeps them tied to a property even as market conditions change. Furthermore, a building itself can be liquidated or used as collateral for a loan when investors need cash. Since there are many different types of commercial properties, investors can easily diversify their portfolios.

Prior to investing in real estate, it may be worthwhile to thoroughly research a property. This may mean looking into existing commercial leases or other variables that could impact a property’s ability to generate revenue. An attorney may help with the due diligence process by obtaining documents or investigating any potential red flags. If necessary, an attorney could represent an investor in court if a dispute related to a commercial property arises.


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