Investing is always challenging. First, there are so many to choose from. There are stocks, bonds, futures, CDs, currencies, commodities, new and existing businesses, and a range of other investments too numerous to mention here. Each has advantages and disadvantages and whether one is right for you requires answering a long list of questions about what you want to most get accomplished with the investment and how much risk you can stand.
Those who invest typically fit into a few different groups. The first is a group that wants a quick return. This group wants to have an option to get out fast and make a great return during that short time. They are also open to a good amount of risk and sometimes to a lot of risk. These types of investors will gravitate toward individual stocks, currencies, commodities and new business ventures.
The second group goes the other way. They want to place their money in a long term and steady investment that will over time will generate for them a predictable return. This group will seek out an expert like Al Hartman to help them invest in a Real Estate Investment Trust (REIT) that focuses on giving investors steady returns from leasing out commercial properties. This group does not want to get involved with risky investments.
The third group wants to strike a compromise between these first two groups. They want to stay in investment for a shorter term, they want the prospect of a big return and they want to have their risk limited but not as much as the second group. This group will gravitate toward mutual funds, and investing in businesses with a lower downside risk. Franchises of popular fast food chains like a Houston McDonalds, are a favorite.
For those looking to compromise there are versions of higher risk and higher return scenarios and the lower risk but lower return strategy that can be applied to an investment that would not normally fit into the category. Here is an investment that can be made to fit.
Investing in Commercial Real Estate
Investing in a REIT guarantees that an investor will have his risk spread over a large amount of commercial properties and managed by experts in commercial real estate. This strategy produces risk against market downturns and if there are several properties that might not perform. It also produces steady returns for investors. The downside is that returns are always going to come within a range and never make a sharp jump to the positive side.
A Strategy for a Higher Return
A way to create more upside potential by real estate investing is to selectively purchase properties outside of the REIT that have high potential. These properties would typically need to be renovated and can be either rented out or sold and the potential for a high profit will be there providing you:
- Understand the market where you purchase the property. Is it going up or down? What are properties selling for? How long are they typically sitting unsold?
- Engage a skilled team who can assist you in buying renovating, marketing and selling the properties.
- Work closely with finance companies who help you to leverage your investment into the properties. This approach allows you to purchase and flip several properties at a time while minimizing your capital outlays and risks.
Develop a clear as a photo strategy, have faith, and stick to it and you will find that you can successfully achieve a balance that provides a winning proposition: better returns at lower risk.