Timing is everything—and real estate investing is no exception. Wondering what is the best time to invest in commercial real estate? It’s when the economy is down.
Lessons from the global recession
The global economic slump in 2008 is anticipated as the longest and deepest since the Great Depression of the 1930s. The downturn has affected the finance system in the United States and other countries worldwide.
The biggest impact of the economic crisis is on the purchase and sale of commercial properties. While the stock market is plunging at record lows, an increasing number of investors are considering investments in commercial real estate. The commercial real estate typically refers to shopping centers, office buildings, warehouses, and manufacturing plants.
What makes commercial real estate attractive during an economic slowdown?
Intense financial difficulties force many developers and owners of commercial real estate into going bankrupt. What the commercial real estate owner does is to put the real estate on the financial market at a discount, which certainly attracts buyers who can seal the deal. Therefore, prices of real estates go down when the economy is slow. And with the current economic crunch, now is the best time to invest in commercial real estate.
Considerations before jumping in
Because commercial real estate is a long-term investment, it needs to be done with caution. You don’t get rich overnight by investing in commercial real estate. If you think about purchasing a commercial real estate investment property, you must be aware of your future management responsibilities regarding physicals effort and time. If you are purchasing a net-leased property, the tenant pays most of the expenses, making property management a lot easier. This is the ideal property for you if you do not have much time to spare for your commercial real estate investment.