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Eliminate Risk From your Portfolio

A Blog of Richard Crenian

What Is The Safest Way To Invest In Commercial Real Estate?

There is no doubt that commercial properties offer many advantages for real estate investors. They can offer higher profits, steadier income and less risk. However until now many have found it difficult to make the leap into commercial real estate themselves for one reason or another. Some have found that trying to find and effectively evaluate deals accurately themselves can be difficult, while others have feared taking on large commercial loans or debt, or have just been scared of the time consumption or being responsible for managing commercial properties.

Fortunately companies like us at REDEV Properties have developed a safer way to invest in commercial real estate, with easy entry and receiving cash flows either through the tenancies or appreciation. These newer turnkey commercial real estate investment opportunities are providing an easy way for investors who have previously been putting their money into riskier and more management heavy investments in the residential market or stock markets, to enjoy the benefits of commercial property.

By having an expert who vets properties with in-depth due diligence and is able to provide high quality expert management it is much easier to make sense of commercial opportunities and uncover the real value and potential.

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The Turtle Always Wins

A Blog of Richard Crenian

There is no question that residential real estate investment was responsible for enabling massive wealth accumulation for many in the first half of the last decade. However looking forward from 2011 and beyond there are many ways in which commercial real estate provides superior and more intelligent investment opportunities for those seeking safer options, truly passive income and good growth potential.

Yes it is true that many institutions and individuals have been looking to the US for bargain priced real estate deals and have been taking advantage of the many distressed homes available. However in terms of management, future potential and security it is hard to beat investing in Canadian commercial properties, especially multi-tenant plazas and shopping centres.

While there may currently be a surge in new US based real estate investment companies and real estate agents touting the benefits of buying foreclosure homes it has of course been proven time and time again in history that when there is a big rush in one direction the best opportunities lay in taking a different route. Not to mention that the housing woes south of the border are far from over.

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Cash Flow is King! A blog of Richard Crenian

In commercial real estate, a property’s value is largely influenced by its net operating income. A commercial real estate owner, therefore, is able to increase his/her property’s value by simply increasing the net income.

Depending on the capitalization rate of commercial properties in that area, increasing a property’s net operating income will increase the property’s value in a substantial manner, but it will also achieve an increase the owner’s cash flow, which is what the ideal would be.

“How to do it?”

There are several ways to increase the net operating income of a property in order to increase the value of the property. In order to accomplish this, you would either have to increase the revenue that is generated from the property, pay down the mortgage, or “value add”.

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