A well-rounded investment portfolio with a diversified selection of assets insulates you from market fluctuations and minimizes risk. In addition to stocks, bonds, and liquid assets, adding investment properties to your portfolio will provide the long-term stability and reliable growth you need. Commercial real estate offers a variety of features that make these properties extremely attractive for those wishing to diversify their investments.
The Benefits of Commercial Investment Properties
A Strong ROI
While variations in local markets will determine the exact return on investment, retail spaces, office buildings, and multifamily housing typically outperforms the S&P 500 index. On average, commercial property investors enjoy a 9.5% annual return, nearly a full percentage point more than the S&P 500 rate of growth over 20 years. After factoring in the profits from rent and other monthly revenue sources, your returns may be even higher.
Although the appreciation of the property and the equity you’ve established can only be accessed by selling the property, commercial real estate holdings also provide monthly income in the form of rent payments and other fees. These funds can be reinvested in the property, further increasing its value, or used to further expand your portfolio.
Protection From Market Irregularities
Unlike most other assets, real estate values are only tangentially related to the stock market, which can often be volatile. Economic factors that often cause sudden drops in the value of stocks typically don’t affect commercial real estate, providing a strong foundation for your other investments.
Obtaining financing for commercial real estate is often complex, which is why investors throughout Ames and Des Moines, IA, turn to Howell Investment Finance. These mortgage brokers specialize in commercial investment properties, with loans from $750,000 up to $50 million. To discuss your options and begin the application process, visit their website or call their offices at (515) 233-8228.