Since real estate is not directly traded on a centralized exchange, the physical real estate market is characterized by relative lack of liquidity, large lot size, and high transaction costs with properties that are fixed at a location and heterogeneous. Real estate investment lies in three principal areas: 1) indexing, benchmarking and measurement issues in the real estate market; 2) the risk-return and diversification properties of real estate investment, both internationally and within specific markets and asset allocation issues; and 3) the economic determinants of returns in real estate.
Investing in Commercial real estate is a great way to add additional properties to your investment portfolio. A lot of times investors forget that there are opportunities outside of the residential real estate market. Having commercial investments adds some variety and options for your portfolio. Commercial real estate properties can be range from apartment properties to office buildings. Unlike the stock market, where today’s hottest stock can drop like a stone tomorrow, Real Estate is a stable and reliable investment. Equity investments can be erratic, uncertain and volatile. With knowledge about and understanding of the trends that impact it, and with smart planning, Real Estate investment will predictably appreciate and create wealth for investors. It is important to consider this type of investment even if it is not part of your current plan. Like with any type of investing, it is very important to gain as much knowledge as you can before making those tough decisions about what to invest in.