The Value of a Tangible Investment
It sounds like a rather simplistic idea, but one of the things I value most about my investments in commercial real estate is that they’re literally something I can put my hands on. Once upon a time a man’s monetary value was measured in the livestock he held and the land that he commanded. It was a simple formula but it worked, and there was no pressing need for diversification.
Once the gold standard came into being, options for owning wealth began to increase and new ways to invest were created.
For me that all translates into opportunities—in everything from biotech advancements to sustainable solar research—all of which are great and have their own advantages.
Yet as much as I support and encourage investment in ideas, innovation, trends and trade, I’ll always have that deep-rooted appreciation for an investment I can visit, see and touch.
In that same kind of way, the return on commercial real estate has a tangibility that I really like. It’s something that genuinely promises income via tenants. The arrangement is clear and not subject to what are sometimes arbitrary fluctuations. Profit is direct and, for all intents and purposes, quite dependable.
Likewise, price evaluation is refreshingly clear based on specific criteria. Historical data generally indicates quite simply what value is there and what the forthcoming value is likely to be, especially with commercial real estate, versus residential.
This, again, affords investors what—for lack of a better analogy—is a hands-on relationship with their investment.
In that regard, it’s very easy for an investor to know exactly where their money is going because they have a concrete opportunity to familiarize themselves with the product. The old adage, of course, cites location first, second and third, and that translates to mean only the most desirable and sought after Class A properties. And with few exceptions those Class A’s—and some well-situated Class B properties—are steadily populated by a desirable and dependable clientele who play a unique role in securing your investment.
These facts combined are part of the reason I see commercial real estate from a low-risk vantage point. The points I’ve outlined go a long way in removing the mystery from the investment.
To me, quite frankly, the only real remaining mystery is why more people don’t take advantage of it. Risk can be low and manageable, and return can be substantial.
It’s always great to see the stats on your investment going up, but take it from me—it’s a unique joy to get in the car or on the plane and pay an in-person visit to your investment.