Why Should I Invest In Commercial Real Estate Fund? Investors must look into buying commercial property due to its historical performance and high potential yield. Based on a study by Manulife Asset Management, commercial property has consistently outperformed other investment types, such as stocks and bonds. The study, which looked over asset types over a 25-year period, found that commercial real estate has experienced stable growth with time, even avoiding the severe aftereffects of economic cycles. While commercial real-estate is not entirely immune to economic changes like inflation, the Manulife report suggests that more in-depth lease agreements and changing market needs have contributed to the industry's stability through time. Additionally, commercial property is usually privately owned, creating a number of benefits for investors. As a result of these factors, commercial property often avoids the volatility observed in publicly traded assets. The commercial real-estate industry has only continued to cultivate, with the upcoming year expected to be better than ever. A written report published by the Urban Land Institute, predicts that industrial and multifamily assets will be among the year's strongest investments. As a finds balance between new construction and existing properties, several opportunities will arise for those hoping to invest in commercial real estate. [ Do you want to make your money work for you? Attend our FREE online real estate class to find out how passive income strategies in real estate can assist you to achieve your financial goals. ] Commercial Vs Residential Real Estate Investors often think it is challenging to decide on between commercial and residential properties. Luckily, these opportunities aren't mutually exclusive, as investors might find success pursuing both. For investors looking to decide on between the two property types, here certainly are a few factors to consider. The absolute most obvious difference when taking a look at commercial vs residential property is the profitability of each investment. Commercial properties tend to be much bigger investments, hold more tenants and have the potential to yield larger profits. However, this also means that commercial property can require more capital and expertise when getting started. Investors hoping to pursue commercial property must have specialized familiarity with the market area, property history and estimated revenue. It can be helpful to really have a strong awareness of detail, and anticipate to conduct extensive research before moving forward with a property. Residential property, on the other hand, is usually considered to be a tad bit more beginner friendly. Investors still require a strong market knowledge, nevertheless the profitability may be slightly easier to predict centered on comparable properties. It's not uncommon for beginner investors to lean towards residential properties and work their way as much as commercial investments. Residential strategies will still yield high profit margins, which investors can subsequently use to produce their liquid capital to transition into commercial properties. Having said that, some investors may find success in commercial real estate right away. While each strategy requires investors in your thoughts their due diligence, those willing to put the job in will find success with either. Passive Commercial Real Estate Investing While commercial property investing might be more difficult to break into as a starter, there is a method that makes this easier—passive commercial investing. Passive commercial investments are very attractive since they allow investors to get started in commercial property with less time and risk. Newer investors can work with ‘sponsors'who acquire and develop commercial properties and have done the study and work with putting a deal together. Another reason this type of investing is popular is because passive nature. Passive investments offer the freedom to pursue other opportunities, while still achieving long-term financial rewards. This makes them perfect for investors hoping to construct wealth with very little time and effort. To learn more on passive commercial property investing, make sure to read our getting started guide. Benefits Of Commercial Real Estate Investing When thinking about “why invest in commercial property,” the most obvious place to get the answer is to review the numerous benefits offered. Commercial properties represent the opportunity to achieve financial success, build a solid portfolio and more. Listed below are some of the benefits that include commercial real estate investing: Potential Returns:The profitability of commercial real-estate is why is it such an attractive investment opportunity. According to a recent study, commercial real-estate can pay upwards of 10 percent in returns. Compared, the exact same study found that stocks paid only three percent annually. Equity: Equity describes the total amount of value an investor has accumulated in a given asset over time. In commercial real estate, investors build equity in properties quickly and can benefit significantly because the property appreciates in value. Cash Flow: Anyone asking themselves “exactly why is real-estate important” should consider the advantage of steady, long-term cash flow. While many investments are just profitable when bought and sold, real-estate represents the chance to generate monthly rental income. Leverage: Generally, property isn't purchased entirely but, instead, with an advance payment and mortgage. This ability to buy assets without full funding can greatly increase an investor's leverage and therefore, their chance to reach higher gains than whenever using other asset types. Investment Portfolio: Investors of most experience levels can take advantage of a diverse investment portfolio. The chance to invest in a tangible asset, like commercial real estate, can often strengthen any investors financial standing.