As we move forward in life so do our questions about our futures. A common investment question today is “How do I invest for my future” or “Where do I invest for my future”. A great low-risk investment tends to be in real estate. The market is stable, the returns are good, and even in a low economy the right investment can still bring a great return.
Real estate investments can be difficult and time consuming, so let’s take that out of the equation. Many of us don’t have the capital to purchase an entire property, or time to manage purchase, maintenance, and sale of said property, so what do you do? This is where hedge-fund property investments make a difficult decision much easier. The investment can be smaller, but without a cap. You are not responsible for any of the purchase, or sale of said property, and you get to use an expert, experienced, investor to be sure the decision is right.
Based on July 2018 data from the National Council of Real Estate Investment Fiduciaries (NCREIF), private market commercial real estate returned an average of 9.85% over the past five years. This credible performance was achieved, together with low volatility relative to equities and bonds, for highly competitive risk-adjusted returns. Investing in commercial real estate can be lucrative and serve as a hedge against the volatility of the stock market. Investors can make money through property appreciation when they sell. This is achieved through an indirect investment, or a real estate investment trust (REIT). In addition to offering a stable, rich source of income, commercial real estate offers the potential for capital appreciation, as long as the property is well-maintained and kept up to date. And, like all real estate, it often moves in the opposite direction to the stock market, making it an effective diversification option to equities in a portfolio.
- Hedge against stock market
- High-yielding source of income
- Stable cash flows from long-term tenants
- Capital appreciation potential
The main drawback of investing in real estate is illiquidity or the relative difficulty in converting an asset into cash and cash into an asset. Unlike a stock or bond transaction, which can be completed in seconds, a real estate transaction can take months to close. Even with the help of a broker, simply finding the right counterparty can be a few weeks of work. However, with a hedge investment like Monolith Investments this is a non issue as it is handled by the hedge fund management company.
That said, advances in financial innovation have presented a solution to the issue of illiquidity in the form of listed REITs and real estate companies. These provide indirect ownership of real estate assets and are structured as listed corporations. They offer better liquidity and market pricing but come at the price of higher volatility and lower diversification benefits.
Buying a commercial property can be complicated. The right financial advisor can guide you to a great decision that works with your financial goals. Here at Monolith Investments we make the process even simpler, you can review our past and current investments through our investment offerings page, or establish an account through our secure investment portal. If you still have questions or want to know more about commercial property investing, feel free to take a look at our home page, or contact us directly, we are always happy to help. Stay tuned for more information about how we can secure a lucrative and safe future for your and your family.