DiversyFund sponsored this post. All opinions expressed are mine.
Diversifying your investments is a must when it comes to investing.
Stocks and bonds are often the most popular investment options, but you must go beyond them to build real wealth. Commercial real estate is a great investment.
You can diversify your portfolio and increase your net worth by investing a portion of your income in real estate.
Here I will discuss the pros and the cons of investing in commercial property, as well as how to invest online in commercial properties without large sums or having the hassle of managing and negotiating properties.
Table of Contents
What is Commercial Real Estate (CRE)?
Commercial Real Estate: Five Types
Commercial Real Estate Investing: Pros and Cons
Commercial Real Estate Online Investing
Some Quick DiversyFund Facts
What is Commercial Real Estate (CRE)?
You need to know what commercial real estate is before you invest.
Commercial real estate, often abbreviated “CRE”, is an investment in land or buildings that will generate income, whether it’s from dividends, capital gains or rental income.
Commercial real estate is sometimes referred to as “alternative investments” because it does not fall under conventional investment categories like stocks, bonds or cash.
Real Estate Investment Trusts or Exchange-Traded Funds (ETFs) are two ways that investors can access commercial real estate.
Commercial real estate investment has traditionally been reserved for individuals with high net worth, as owning commercial property would require a significant amount of capital.
With online platforms such as Diversyfund it is not necessary to pay large amounts of money upfront. More on this in the next section.
Commercial Real Estate: Five Types
You probably already have an idea about the type of property that falls into this category. Let’s look at these properties in more detail.
Office Buildings
Office buildings are the most common type of real estate that comes to mind when you think about commercial property. They can range from skyscrapers and suburban office buildings to more traditional buildings.
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Retail buildings are also popular investments in commercial real estate. Consider places such as restaurants, shopping malls, drugstores, etc.
Industrial
Most industrial buildings are located outside urban areas. They house a wide range of industrial tenants. You may have industrial parks near you that house many of these buildings. Think of warehouses, smokestacks and heavy manufacturing.
Multifamily
Multifamily is another popular commercial real estate investment category. Apartment complexes and condos in high-rise buildings are included in the CRE category. Commercial buildings can have more than four living units.
Special Purpose
Commercial properties which do not fall into any of the categories above, but cannot be used for anything else. Amusement parks, stadiums and airports are examples of these types of properties.
Commercial Real Estate Investment: A Path to Wealth
Commercial Real Estate Investing: Pros and Cons
There are always pros and cons to investing in different assets or fund.
Diversification is the key to success in investing.
Here are some pros and cons to investing in commercial property.
Commercial Real Estate: The Pros and Cons
Commercial real estate can be a good option if you want to diversify your investments and build wealth. Consider these common CRE benefits:
Commercial real estate has historically not been affected by a downturn in the stock market. These investments are a popular way to protect yourself from the volatility of stock markets.
Commercial real estate offers more opportunities for rental income, appreciation and dividends. Due to lower vacancy risk, longer lease agreements, etc.
Commercial real estate has a lower level of volatility. It is not traded as stocks and bonds and is less affected by economic events and news.
Capital appreciation potential: This means that the value of commercial real estate can rise. If you decide to sell, your purchase price could grow significantly.
Tax benefits: If you are a real estate investor, then you may be able to claim tax deductions for interest income and depreciation. Consult a tax specialist before making any investments.
Cons of Investing in Commercial Real Estate
As with any investment, there are pros and cons to consider.
Commercial real estate is a illiquid investment, which means that your money will be locked up for a longer period of time. Real estate requires a longer-term approach. Selling is therefore more difficult than selling a bond or stock.
Investing in commercial real estate traditionally requires a higher initial capital investment. This threshold is now changing with the advent of REITs and Fintech.
Real estate is more likely to have higher risks. Consider property damage, insurance, and maintenance costs.
Fintech is helping to alleviate some of the challenges associated with traditional commercial property investing.
DiversyFund makes investing in alternative investments (such as real estate) much easier and less stressful.
Commercial Real Estate Online Investing
We now have more investment and diversification options than the 1%.
Commercial real estate investing has become easier, giving more people a chance to create wealth.
Traditionally, commercial real estate investments were made by purchasing a physical property or investing directly in a partnership with multiple partners.
These can be very expensive, require time management and education or, in the case a REIT publicly traded, they will follow stock market volatility.
You can now invest online in REITs that are not publicly listed and consist of actual physical properties.
Commercial Real Estate Investment: A Path to Wealth
What is Diversyfund
DiversyFund, an online platform, allows you to invest as little as $500 in commercial real estate fund. The platform is also free!
Growth REIT, a Real Estate Investment Trust (REIT), is regulated by the SEC and builds wealth through cash-flowing apartment properties.
They are primarily focused on capital appreciation over the long term from renovating and repositioning the multifamily properties that they own. Here you can find a complete list of all their properties and potential returns.
The team has a total of four decades in real estate investment experience. This ensures that their knowledge of the industry and the purchasing of assets are of the highest standard.
DiversyFund Difference
DiversyFund is vertically integrated, which means they source deals, sell properties, and do all of that.
DiversyFund owns all of the properties they use (they have their own real estate division), while most of their competitors rely on third parties.
This is the reason DiversyFund is able to eliminate all platform and management fees – as they get money from acquisition/developer fees and therefore don’t need to collect fees from investors.
They are also not a crowdfunding platform for real estate. The platform was designed to allow alternative investments to be made available to everyone (including non-accredited investors). non-accredited investors).
Start Your Business in Just a Few Easy Steps
DiversyFund allows you to create an account for free in just a few moments.
Search Available Investments: Once you’ve joined, you will have access to all the investment funds available. Anyone can invest in their Growth REIT with a $500 minimum. This Real Estate Investment Trust (REIT) is designed to provide income and diversification by investing in DiversyFund’s portfolio of properties.
You can complete your investment quickly online when you’re ready. You can contact us by using the DiversyFund Live Chat or their Investor Relations team, or scheduling a phone call if you have questions.
DiversyFund Dashboard allows you to monitor your investments. Review your portfolio and track your current total invested value. You will receive quarterly investment reports as well as annual tax documents.
Commercial Real Estate Investment: A Path to Wealth
Some Quick DiversyFund Facts
Investors will be protected by a preferred return of 7% to investors, before the Sponsor is paid. DiversyFund receives a profit split.
DiversyFund shares the profits with the investors in a ratio of 35/65 after the preferred return is reached. After the investors reach a 12% annual profit, the profit split is 50/50.
DiversyFund is a partner in your investment, unlike other online platforms which act as brokers.
You can invest directly in their assets.
DiversyFund, unlike its competitors, does not charge platform fees due to their vertical integration.
Your return will only be under the ownership of their team.
DiversyFund’s FAQ page is a great resource for anyone looking to learn more about the platform, funds, payment methods, or anything else.
