Commercial Real Estate Investing
Entrepreneurs who are interested in commercial real estate investing may find that a little business savvy and a lot of research and preparation can yield some very profitable results. Investors should tap into the wide variety of resources and advice that are available on the subject. If successful, anyone who chooses this area of commerce can make a good deal of money. Of course, as with any investing activity, there can be large risks. Researching the market is very important, as is an understanding the nature of the real estate business. If an individual feels prepared to do so, the first step in commercial real estate investing would be to find an appropriate property. Before making an offer on any property, a wise investor will have prepared a list of needed criteria. These criteria could include the type and size of the property, the lot size, what the building will be used for, and other concerns. If the property in question meets that criterion, further research can begin. The investor will want to ask a few pertinent questions before making an offer. Is the price that is being asked for the property a fair market value? What kind of improvements can be made to increase the value of the property? Will this location be likely to earn a good return on the investment? If the answers to these questions are satisfactory, the investor may be ready to move forward.
After an offer has been made and accepted, financing that is geared toward commercial real estate investing can be attained. The sources for this financing could include banks loans, private lenders, or commercial lenders. For this type of investing, borrowing funds is generally a good idea. This will allow the investor to keep cash on hand in case it is needed. In addition, the hope is that the use of the property will generate enough profits in the future to pay off the loan and bring in additional money for the owner. The future value of the property will hinge on a variety of issues as well as the intended use of the building that is being purchased. If the building is to be used as a business, is the surrounding zoning appropriate to this purpose? If it is to be converted into residential space or rented out as apartment units, is the neighborhood one that potential renters will find attractive? Will the costs of these conversions be reasonable? After answering all of these questions, anyone who wishes to succeed at commercial real estate investing will want to consider how long they want to keep the property. Is this an investment that is to be held over the long term, or will the investor wish to sell the improved property at a profit?
Another trend in commercial real estate investing involves increasing retirement savings through real estate. Using retirement funds for investments of this nature can be risky. But if successful, such risks can make the dream of early retirement a reality. Of course, the overall market should be a determining factor here. If the market is down, the prospects of making money could be limited. Risking important retirement capital in such an environment may be a bad idea. But, if the market is robust, a wise investor may be able to increase savings in a way that is not possible with other investment activity. Purchasing land for development, commercial buildings, or buildings that can be converted into apartments or condominiums can yield considerable profit if done wisely. This approach will usually be more successful if the individual has a good deal of money to spend. As with any investing, choosing the safest route when placing important funds at risk is a good idea. Participating in sound commercial real estate investing will involve a lot of research into the local area. Have previous investors had success with purchasing and reselling properties here? If a property is improved, will the new selling price be high enough to make the effort worthwhile? Of course, a diversified real estate portfolio may offer an extra edge of security, as opposed to risking all funds on one property.
There are many common mistakes that can be the downfall of a hopeful real estate entrepreneur. A lack of knowledge of the local market can be a major mistake in the area of commercial real estate investing. A failure to put effort into due diligence, as well as poor up front planning, can be detrimental to success as well. Staying too long with a loosing project can be another sign of eventual failure. Buying up too many properties without any sound plan can prove to be a costly mistake. In these areas of investment, the entrepreneur should not be motivated by greed, but by sound business practices. The Bible mentions the importance of remaining content no matter what the circumstances. "Not that I speak in respect of want: for I have learned, in whatsoever state I am, therewith to be content." (Philippians 4:11)
Anyone who is interested in commercial real estate investing may benefit from the wide variety of software products that are available. These programs can help investors with such issues as cash flow projections or investigating various tax benefits. Mapping out monthly projections of costs and liabilities can be made easier with this software. Calculating the rate of return is another useful feature. Whether or not an investor chooses to use these programs, the potential for financial growth in real estate can be very good for the educated entrepreneur.
Environmentally Responsible InvestingProponents of environmentally responsible investing (ERI) may soon realize fast-growing profits. Putting greenbacks into ecologically-minded enterprises, aka green industries, may not only yield short-term monetary gains, but also long-term benefits for a global society. Green industries, especially those majoring in researching sustainable and renewable energy sources, are becoming much sought after as profit-making investment choices. Concerns over the effects of global warming and greenhouse gas emissions have produced a new breed of businesses and corporations whose sole purpose is to research, develop and manufacture products, goods and services geared toward sustaining the environment and restoring the delicate balance of the ecosystem.
From the beginning of creation, God entrusted the "keeping of the earth" to mankind: "And God blessed them, and God said unto them, Be fruitful and multiply, and replenish the earth, and subdue it: and have dominion over the fish of the sea, and over the fowl of the air, and over every living thing that moveth upon the earth" (Genesis 1:28). "And the Lord God took the man, and put him into the garden of Eden to dress it and to keep it" (Gen. 2:15). As climatic changes impact the environment across the globe, governments around the world are aggressively tackling ecological issues which effect societies from Maine to Mongolia. From sustainable agriculture and biotechnology to hybrid vehicles and eco-friendly building materials, hundreds of thousands of industries are going green to help save and keep the earth. Environmentally responsible investing is crucial to helping researchers, scientists, and environmentalists find and harness alternative energy sources before the earth is depleted of vital, but unfortunately non-renewable natural resources.
In the late 18th century, the industrialization of Europe and America birthed mega steel corporations, railroad conglomerates, and shipping industries -- prime investment markets for the nouveau rich on both shores. However, it was impossible for 18th century industrialists to foresee the adverse affects caused by an increased usage of non-renewable fossil fuels like coal and oil to run steam engines, cargo ships, factories, and later, automobiles, airplanes, and trucks. Over the last two hundred years, global industrialization, technological advancement, and modern man's insatiable appetite for non-renewable energy has nearly exhausted the earth's supply of natural resources. Studies indicate that at the current rate of usage, the earth's oil reserves have only 45 years of production remaining, while natural gas has only 72 years. By the time a newborn baby becomes a silver-haired senior, natural gas reserves will have been almost totally depleted. Global warming, primarily caused by greenhouse gas emissions from automobile engines, has caused glacial meltdowns in the Antarctic, flooding in India, species extinctions in Africa, and threatens to end mankind's peaceful coexistence with nature. Ecologically-minded companies are waging a battle against time to develop and produce alternative sources of renewable and sustainable energy to counteract centuries of industrialized over-consumption and abuse.
Unlike those who invested and profited monetarily during the heyday of the Industrial Revolution, 21st century speculators are proponents of environmentally responsible investing to help support and fund companies that develop alternative energy sources and byproducts. In light of current ecological concerns, investing in less-than-green ventures is tantamount to committing ecocide on a global environment desperately fighting to survive. But, wise investors can help future generations reap the benefits of green industries and corporations committed to deter the effects of greenhouse gas emissions, industrial pollutants, and toxic waste. Investment opportunities abound in corporations and research facilities specializing in biomass production to develop plant-based gasoline and oil as alternatives for rapidly depleting fossil fuels. Investors may also choose to buy into cash-generating businesses engaged in researching hydroelectric, solar, wind, and geothermal power to alleviate the strain on traditional and non-renewable energy sources such as electricity. Hybrid vehicles, sustainable agriculture, and water purification systems are also excellent ventures for environmentally responsible investing, which may pay off in hugely in future monetary and ecological dividends.
Investors concerned about the environment are usually proponents of socially responsible investing (SRI). Committing money to a cause has become a major motivator for consumers seeking to make wise investment decisions. While the destruction of the environment is a major global concern, the destruction of humankind through war may be an even greater one. SRI advocates usually promote world peace and avoid investing in companies which manufacture nuclear and conventional weaponry, war planes, or explosives. Proponents of SRI also may refrain from buying U.S. Treasury bonds which finance the Defense Department. Socially responsible investing involves a commitment to purchase stocks, bonds and mutual funds in firms dedicated to humanitarian efforts around the globe and community-minded enterprises which improve the quality of life for indigent and underserved individuals. Other investments might include organizations which provide relief to victims of local, national and international disasters, such as tsunamis, hurricanes, famine and floods. Socially responsible investing also supports organizations which dispense food, healthcare and financial aid to eradicate poverty and destitution, both at home and abroad.
Speculators seeking to find companies for environmentally responsible investing or socially responsible investing should log onto the U.S. Securities and Exchange Commission's web site to determine if a company is registered with the SEC. Publicly traded or privately held companies must be be registered with the state securities regulator before they can legally sell securities. Investors should also seek advice from brokers and stock advisors before making a firm investment decision about companies who appear to advocate environmental or social awareness. The Secretary of State's website will also have information about a potential investment company's incorporation, officers, products, and services. A reputable business should also have a Dunn and Bradstreet registration, which will include detailed information about its chief operating officer, board of directors, and points of contact, along with a history of business interests. Logging onto the company's website should provide insight into the enterprise's commitment to the environment and support of humanitarian efforts. Making a responsible investment in the environment and humanity today will ensure a better tomorrow and a healthier global society.