The commercial real estate market has changed significantly over the past several years. A world once dominated by large corporate conglomerates and developers with ties to major construction firms has slowly given way to new opportunities. Private investors and investment groups are cropping up in virtually every major real estate market. In large part due to the internet and advanced technology, real estate investing is no longer a mysteriously complex endeavor.
Benefits of Real Estate Investing
Real estate investment opportunities come in many different forms. Some investors prefer to have a role in the commercial real estate business end. Some hold positions of authority or make decisions for the commercial properties’ development, sales, or daily operations. Investment opportunities are plentiful for such individuals who want to be involved in the process.
Investors who are more interested in the income potential than the rewards of sweat equity also have plenty of opportunities within the commercial real estate markets. Passive income streams in commercial real estate are available for novice and experienced investors. Varying rates required for the minimum contribution amounts make it easy for even first-time investors to become acquainted with the many prospects available in real estate investing.
Pitfalls of Natural Disasters
Commercial real estate operates much like other traditional investment opportunities. They are subject to standard market conditions, although they typically respond more slowly to those changing conditions than more liquid investment vehicles. When external conditions impact the value of the commercial real estate, investors may opt to stay the course or alter their investment strategy. Aside from a global pandemic that forces mass closures of office buildings and retail space, commercial real estate properties face only a few challenges.
Natural disasters can literally threaten the very existence of commercial properties. Current building codes take extra precautions to ensure buildings withstand high winds, heavy rains, and even earthquakes. Despite the efforts to protect against the elements, some investors are still wary of investing in commercial real estate in areas that are likely to be impacted by natural disasters. Insurance premiums are higher in correlation with the propensity for natural disasters. Although this can add to the purchase price, it also provides some protection for investors.