Residential as well as commercial real estate has both been a lucrative investment vehicle for decades. If you’ve been investing for long, you already know the importance of timing. There are good times and bad times to invest in both markets.
As are many other investors you may be curious about the temperature of today’s market. We’re all wondering about the investment climate as it relates to the shift in presidential administrations. How will current rising interest rates and relatively high property prices affect us? Is the boat about to be rocked for commercial investment?
We’re guessing there are a few reasons commercial real estate is still going to pay if you invest now. First of all, investors, in general, are making money right now. Since the election, the Dow Jones Industrial average has closed high, setting six new records. And yes, investors are still buying stocks.
Real estate prices aren’t high right now, but that doesn’t mean you shouldn’t invest, too. Right now, commercial, or institutional quality real estate yields are high above the historical average. The economy is strong!
All in all, the outlook for commercial real estate is good right now. But as with all areas of investment, there’s no knowing for certain what the future will bring.
It’s true, 2016 year started out slow. In the second quarter of the year, gross domestic product increased only 1.4%. However, according to the Bureau of Economic analysis, things look better. US gross domestic product in the third quarter has risen 2.9 percent.
What About Commercial Rental Property?
Job growth is putting more dollars into pockets across the country. This is creating demand for commercial properties. Rents are rising, and fewer properties are left unoccupied. This is due in part to significant job growth over the past several years. Continued job growth will only serve to increase demand for office space, and apartments.
Multifamily Homes: How Does The Future Look?
If you’re considering investing in multifamily properties, there are and always have been advantages. Especially if you plan to occupy one of the units for onsite management, this can be a lucrative investment.
All in all, the outlook for commercial real estate is good right now. But as with all areas of investment, there’s no knowing for certain what the future will bring. That in mind, multifamily homes provide a stable alternative to commercial real estate investing.