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In: Investing
11 Jul 2009These days, Americans are all too aware that they can’t depend on Uncle Sam to take care of them in retirement, and relying on their employer isn’t an option either. It’s time to use wits and discipline to responsibly define our own retirement options.
Having seen the rise and fall of the stock market, the real estate market, and even gyrating prices in commodities like oil and gold, it can be hard to know where to put your money for the best combination of return, security, and limited hassle. The good news is that commercial real estate still provides a viable investment alternative, and it is relatively untrodden ground, since investing in this arena takes more than a little planning, capital and initiative
Despite the excellent historical returns in the stock market – 11% on average – the up and down gyrations of the ticker tape are frustrating to many investors. There’s little that anyone in the public can do to affect the value of his stock investments. You just have to watch prices fluctuate and hold on for the ride.
That’s why investing in real estate makes so much sense. IF you want to work with an asset you can control, rather than just watch, you may want to look into commercial real estate investing.
Many investors dip their toes in the water with a few rental homes or a small apartment building. That’s a great place to start building wealth and learning the commercial real estate industry. However, for investors looking for serious retirement income that can be relied upon to grow in a hands-off portfolio, commercial real estate certainly has its place.
Commercial property for beginners is not something that should be entered into gently. It’s tough to read a book or talk to a broker and actually understand everything that’s involved in making and financing a good real estate deal, and then managing your property once you have it in place.
I think the two best ways for beginners to get involved in commercial real estate are to: a) Work their way up through the ranks of owning smaller properties or b) Work with a mentor of some kind – ideally another property owner in your marketplace – to find out what they do, how they do it, and why they do it.
You can find a lot of salesmen trying to get you started in commercial real estate by buying their magical business-in-a-box but their claims of simplicity from just following a simple system are often over-stated. You can get yourself into a lot of hot water in commercial real estate as a beginner unfamiliar with the business, so if you can’t afford to make a mistake, it’s best to grow slowly and pay your dues. When you do dip your toe in the water, let the voices of experience guide you and check with your attorney, CPA, and other investors in your area to help you confirm you are on the right track.
If you need additional strategy coaching from someone who is acquainted with commercial real estate, but not “vested” in seeing you emerge with a certain outcome, consider hiring a pro property specialist. My business partners at The Real Wealth Company are financially secure and living off of their real estate income. If you would like to talk to them to see how they do their business, or get recommendation on how you to enhance your operations, they are available on a simple pay-as-you-go system and truly get a kick out of advising our clients and seeing them buy their first commercial real estate property.
Getting good advice can sometimes be the best investment you will make.
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