Typically tenants sign a one year lease for a commercial real estate investment property. This gives investors a hedge against the volatility found in other long-term and short-term investments. In fact, a number of commercial buildings lease for five years and offer tenants incentives for extending the lease. In other cases, a landlord may charge premiums for shorter leases. For these reasons and because commercial real estate is not a publicly-traded investment, commercial real estate investments are not responsive to changes in the stock market. This type of investment has more potential to be recession-proof.
Maarten De Jeu, the founder of SVM Business Advisory, graduated first in his class from Oxford University where he earned his MBA. His international service firm advises top companies and individuals with a high net worth on investment strategies and corporate development. Before starting his firm, he served at Aviva PLC as the Director of Strategy & Corporate Development. In addition to corporate strategy consulting and investment advising, he helped launch SpeakUp as a needed solution for compliance and reporting issues among Europe’s publicly traded companies. De Jeu is also a member of the Public Policy Dean’s International Council at the University of Chicago and a member of Chicago’s Economic Club of Chicago. His advice is to invest in a hard asset such as commercial real estate.
Investing in commercial real estate provides opportunities to recover your initial investment or maximize value. Traditional stocks and bonds can not offer that. The short-term gain potential of commercial real estate investing has the power to balance long-term strategies for the rest of your portfolio. Returns of rent for properties tenents give almost instant availability to short-term cash. These funds can then be reinvested or used to eliminate a short-term cash flow issue.
As a well-known strategic advisor, Maarten De Jeu explains why commercial real estate investment is a key investment and how to start investing. Because hard asset investments are so lucrative, they were at one time reserved only for the rich or for institutional investors. They held a high barrier to entry that does not exist today. Recent laws have removed that barrier and created more opportunities for the average investor. The benefits of commercial real estate are many. There is less risk involved than there is with investing in the stock market. This is not to say that one should not invest in stocks and bonds, however, it is very wise to diversify. Learn more: https://medium.com/@maartendejeu
Investment in stocks and bonds has the added expense of services that must be provided by a certified financial advisor. These fees are not required for real estate investment. As well,l monitoring and tracking asset performance through online access is much more cost-effective and efficient. Over time, the price of goods and services rises. This can pose a major problem for those investors who have only invested in traditional stocks and bonds. It is often the case that those investments do not appreciate at a rate that corresponds with a year’s inflation rate.