Real Estate Investment
Investment refers to the employment of funds that comes to attain growth or additional income. The primary purpose of an investment is to get profits that arise out of the investment. As an investor, I will consider investing in the commercial real estate sector. The real estate sector has proved to be progressing as the populations continue to increase. To begin with, commercial real estate is the property other than the residential lot or a single-family home found in the neighborhood. The commercial real estate industry is similar to residential and industrial real estate in that you are buying a building land when you are purchasing it. In the investment in the commercial real estate sector, I will majorly focus on purchasing land, building houses and apartments on the land then later selling the apartment together with the land. In the investment project, I will use all resources required to accomplish the investment.
In commercial real estate investments, there are both advantages and disadvantages. In benefits, commercial real estate investment has significant levels of profit. The main advantage is that a low-cost property can result in a higher value as time progresses. Secondly, commercial real estate is an ongoing additional source of income, and this can enable one to get long term returns on the investments. Real estate can also allow one to access more credit from financial institutions (Francis & Huggett, 2018). The more income results to more credit. However, the commercial real estate sector has its disadvantages. To begin with, acquiring funding to be used is a significant issue. Real estate requires a lot of capital, and as a result, a source of money can be a considerable challenge. Secondly, a lack of funding can result in more debts that are required to invest. A huge amount of debt will make one be stuck in debt payment. Lastly, real estate has a lot of legal issues, and if these issues are not well-addressed, they can result in problems. I will analyze the possible monthly cash flow, the annual return on investment, comparative market analysis, and the resale value in analyzing the information relating to the commercial real estate investment. With such information, I can analyze the investment opportunity of the commercial real estate sector and evaluate if the investment will be an excellent opportunity.
References
Francis, R., & Huggett, E. (2018). Sustainability goes mainstream: How health and wellbeing are changing real estate. Corporate Real Estate Journal, 7(3), 215-221.