You may be saying to yourself, “this is the worst time for me to consider investing in real estate.” Well, you would be presuming wrong. Granted prices of commercial property such as apartment buildings, malls, and offices have fallen more than 40% over the past two years. Tenants are paying less in rent due to higher market competition creating many rental vacancies.
There has been much news about the number of distressed-property sales that are expected to rise over the next few years, keeping pressure on prices. So, why should you invest in real estate now?
“This is an excellent opportunity for investors to diversify their portfolio and build a solid price appreciation down the road,” said Eric Skeeter, Pillar Property Group.
The real estate industry has worked prudently to raise the capital of more than $30 billion over the past year by issuing new equity and debt. This move has eased many investors concerns that the industry did not have the cash to survive the downturn of the market itself.
“The downturn of the mortgaging market itself has enabled us to acquire properties at fire-sale prices and sell them to potential property investors at reasonable prices. These investors in turn have strong cushion in a rollercoaster mortgage market,” said Steve Tavenner, Pillar Property Group.
So, how much should of your financial portfolio should you side aside in real estate investment? Most financial advisers suggest you should have a good 5% of your portfolio in real estate now.
“I suggest investors to speak with real estate professionals who have inside knowledge at their fingertips before committing 5% of their portfolio to any property venture,” said Skeeter.
It is advised property investors to invest of their financial portfolio in regular intervals this year and next until their allocation hits that 5% mark.
“This is an exciting time for a potential investor because the growth of income is going to be exponential in real near future. If there a time to invest in real estate, this would be it,” according to Tavenner.
The real estate market has had it ups and downs. In the amidst, real investors realize acquisitions of sound properties in these neighborhoods and boroughs of surrounding cities and towns are going to pay some big dividends in the near future.
For more information and questions about how to diversify your financial portfolio in real estate investment, please contact Pillar Property Group and submit query.