Real estate is one of the few viable sectors left for investors who want a chance to earn solid returns in a faltering economy. Business-to-business relationships are also one of the more efficient ways for owners to leverage the power of the non-retail, non-consumer economy for maximum financial rewards. For individuals, real estate fractional shares are the standout opportunity of the 2020s, while entrepreneurs and business owners can earn reliable profits by leasing out office space they already own to other companies.
In the real estate industry itself, many firms specialize in the commercial sector or renting and selling to corporations and businesses. Compared to the retail side of the field, commercial real estate is massive and represents one of the world’s largest financial enterprises. Here are some of the ways in which individuals and companies can face financial insecurities to build wealth and leverage the power and promise of real property for long-term profit.
Individuals
People who want a reliable way to generate better than average returns from their investment portfolios often explore the potential of real estate. Not only are cash flows from real estate stable in most years, but the field offers some of the most lucrative tax benefits of any type of investing. Until a decade ago, it was difficult for non-wealthy individuals to purchase properties outright for cash or credit.
Likewise, there were the unusually high demands on time and labor that came with being a property manager or landlord. Luckily, laws changed, and it’s now easier than ever to take part in the exciting world of property investing via fractional shares. These small increments of ownership come with no landlord duties or requirements to shell out huge sums on whole properties. Instead, they serve as an ideal way for people of all income levels to put as little or as much capital into the real estate market as they desire.
Corporations and Entrepreneurs
Owners of small and large companies often use their property to generate additional income and increase cash flow. Besides what they earn from their primary enterprise, it can be financially rewarding to lease individual offices to other entrepreneurs and owners. For decades, some of the world’s largest insurance carriers have earned significant percentages of their total income by buying and leasing offices in large buildings. In most cases, the insurance firms occupy space in those same structures and emblazon their corporate logo on the top of the structure’s exterior. On a smaller scale, regional companies of all kinds discover the profit potential of earning a regular income from leases to other organizations.
Commercial Real Estate Firms
In the truest sense possible, commercial real estate firms are the world’s largest investors in property. Most of the top players in the field purchase office buildings outright and then search for paying occupants who agree to sign leases of one year or longer. The firms directly invest in and take large risks on each of their major purchases. In the financial collapse of 2008, a number of large and medium-sized firms in the sector went out of business when they failed to find renters. Since then, the market has rebounded fully, and regulators put stricter borrowing limits in place to prevent the same problem from recurring.
