With the commercial real estate market looking extremely profitable, you may be planning to invest in commercial properties. You can invest in offices, warehouses, hotels or eateries, secure your capital and earn profits by investing in profitable properties.
Investors usually form a group or syndicate for commercial property investments. A member of the group is responsible to look for suitable properties for the investment purpose, manage properties and share profits among the members. They receive a flat fee or a percentage of the profits in exchange for their services. If you’re new to commercial real estate investment, it’s best to join a syndicate so that you can benefit from the experience of other members of the group.
Commercial property funds refer to mutual funds invested in the commercial real estate. Here are three popular types of these funds:
1. Direct Property Funds
Direct property fund is the most popular form of commercial real estate investment. It involves direct investments in commercial properties such as parks, hotels, industrial units, and retail stores.
Commercial property investors usually invest in multiple properties. Therefore, they need not worry about the income even if the properties are unoccupied for some time. They can earn income from other properties.
Since real estate investment syndicates comprise of multiple investors, it’s easier for them to collect the required funds. On the other hand, if you buy a single property on your own, you may get into financial problems if it doesn’t generate an income for a period of time.
2. Indirect Property Funds
If you want to invest in the commercial real estate but don’t want to buy commercial properties, then indirect property fund is your go-to option. Instead of buying properties, you can buy the shares of firms that operate in the property development sector. You can check https://scinvestments.com.au/ out to consult with an experienced team that can help you make the right investment decisions.
It’s an alternative route for commercial real estate investments. It gives you the opportunity to buy stocks and shares in pension funds, trust companies, and REITs or purchase stocks, bonds, and shares of other listed organisations.
3. Hybrid Commercial Property Funds
You don’t necessarily need to make a choice between direct and indirect property funds. You can rather take a hybrid approach to secure your investment and increase your income.
In hybrid commercial property funds, you can directly buy commercial properties as well as invest in shares or stocks. It diversifies your investment portfolio and gives you the opportunity to explore a variety of investment options.
If the properties remain vacant for extended periods, you need not worry. You can earn income from stocks and shares. This way, you can control the risks of commercial real estate investment and increase the revenue.
To conclude, direct property funds, indirect property funds, and hybrid funds are the most popular types of commercial property investment funds in Australia. You can consult with experienced investors or acquire the services of investment management firms to make better and more profitable decisions.