Although COVID-19 pandemic has changed how much of the world and businesses have been operating and spending money, the fundamental truth still remains and its that real estate has historically been the safest investment and can be tied all the way down to Maslow’s hierarchy of needs in that one of the basic human needs is safety and security, which for many means a shelter, or in today’s world – a home.
With that said, real estate is a great investment because there will always be a need for it and it also comes in many different forms, depending on the kind of investor you are, your budget, expectations and immediate needs.
Imperial Fund, which specializes in investment portfolio management, explains some options to see which opportunity suits you best.
- Residential properties
Residential real estate is the most common type of real estate investing. People buy places to live, whether houses or apartments. One of the advantages of this type of investment is that demand – in a stable economic situation at the national level – will increase, as the population continues to grow.
Residential properties tend to also be more hedged against local currency exchange risks and the value of the property will grow over the years.
The choice between house or apartment will depend on what each buyer is looking for according to their needs and expectations. For example, it is different if you want to occupy it to live for a period of time with your family than if you only want to rent to foreigners.
- Commercial properties
The acquisition of commercial premises and offices is one of the most dynamic segments, as it gives significantly higher profits than residential real estate.
With this type of investment, you have the possibility of different lease options. Commercial property investors, in addition to having the necessary resources, must also have the appropriate strategies and knowledge of a variety of business segments, good networking, timely advice and realistic economic expectations in order to succeed in this type of investment.
- Industrial properties
Industrial properties differentiate themselves from commercial properties by their purpose. The sale of property used for manufacturing, storage, fulfillment, production and recycling services are just some examples. One positive aspect of this type of investment is that it can be used for various uses, be it as a warehouse, showroom or to produce goods or services. You can also segment and lease the subspaces that are generated. Similar to commercial properties, timely advise and technical knowledge of industrial operations is a vital component in order to succeed in the industrial property sales market effectively. This market, though it is much more complicated than investing in a house, is on the rise especially amongst people who are looking to make an impact with their investments, such as doing good. Recycling distribution facilities is an example of this.
- Retail properties
At a global scale, the construction of shopping centers, even during the increase of online shopping, does not slow down and instead evolves as new store concepts and brands come on the market, which means demand for this is not slowing down any time soon.
In this real estate alternative, variables such as distribution or location must be considered. The latter can influence the success of the premises, since many times the level of sales depends on the number of people who go through that sector.
- Mortgages secured by real estate
This form of acquisition of real estate assets is distinguished from the usual massive sales of credit portfolios, from financial institutions to different investment funds, which include a significant number of non-performing loans that are transferred in bulk.
With this type of investment, the transferring financial institution obtains an indirect benefit since it eliminates the risk of non-payment of the assigned loans while reducing its level of debt and, for its counterpart, the acquirer, in consideration for the higher risk assumed, obtains a significant discount, which results in an investment of greater profitability or lower cost than the direct acquisition of the asset.
However, to confidently face this type of investment, it is necessary to take all possible precautions and receive specialized guidance from experts like Imperial Fund, looking after not only the financial benefits of the transaction, but also and, especially, the actions taken in the legal realm, examining that it is processed correctly in order to avoid that any minor technical disagreement frustrates or delays the intended acquisition.
Imperial Fund is a mortgage investment fund formed in 2014 and headquartered in Hollywood, FL. Imperial seeks to achieve attractive risk-adjusted returns by exploiting inefficiencies in the residential and commercial real estate lending market.
