Our commercial investment real estate advisers speak with owners every day. When speaking with owners about their real estate investments, they will typically ask, “What is your investment strategy?” The common responses are, “I’m not selling; I’m not buying; I’m holding.” After a few follow-up questions, these common responses really translate into, “I don’t have an investment strategy.”
It is very common for real estate investors to purchase or own real estate without a true investment strategy. Each investor typically has goals when they purchase; however, they do not typically have the execution plan laid out to achieve their goals.
Depending on the investment strategy, an investor may look at their real estate holdings as an alternative investment, a tax shelter, the ability to leverage equity, a tangible asset, a hedge against inflation, or passive income known as “cash flow.”
The fact is that owning real estate has all the potential benefits above, but it is up to the investor and their advisers to truly strategize how to maximize each benefit and tailor a plan to execute the overall strategy. However, it should be noted that investment strategies continuously need to be reviewed because of the ever-changing market conditions, investor needs, and overall phase in life. The philosophy of commercial investment real estate is to not only create wealth, but to build a proactive strategy to preserve it.
When evaluating your investment strategy, here are a few questions you can ask yourself about your asset, portfolio, or even a new acquisition:
*At this point in my life, what are my investment needs? Are my assets aligned with my investment needs?
*What are the current market conditions? How does this change my goals?
*What are my goals? How do I know when I have achieved my goals?
*What are my risks? How do I mitigate my risks?
*What are my benefits? How do I maximize my benefits?
*Who is my strategic commercial investment real estate advisor?
-Submitted by CIRE Partners.