Investing in real estate assets is one of the most popular forms of long-term investment. It is a tangible and lower risk acquisition, which usually generates great returns as the years go by.
But what exactly are they and how does their investment work? In this article, we will discuss the basics of real estate assets and how you can get the ones that best suit your goal.
Real estate assets are a category of assets that include land, the buildings on it, and property rights over both.
Types of business assets
Commercial properties correspond to offices, shopping centers, warehouses, hotels and logistics centers.
Commercial:
- Offices: commercial places designed to house companies or organizations. Offices are typically located in urban areas and may be situated in freestanding office buildings or in office towers within larger complexes, also known as business centers.
- Shopping centers: they have commercial spaces to receive retail businesses, food courts, offices, etc. They are generally located in urban areas.
- Warehouses: extensions of the business designed for the storage and distribution of goods. Warehouses tend to be located in urban or suburban areas or in larger complexes.
- Hotels: tourist sites designed to receive guests during their travels. Hotels are usually found in urban or commercial areas and may be located in freestanding buildings or larger complexes.
Characteristics of real estate assets
- Scarcity: land is a limited resource that cannot be produced, which makes it a solid, exclusive and safe investment.
- Durability: Earth constructions are durable, in fact, they usually last more than 50 years if properly maintained. This is why real estate assets are an excellent long-term investment.
- Location – Where a property is located is an important factor that changes the value of the property. Real estate assets located in urban or tourist areas typically have a higher value than properties located in rural areas.
How is profitability generated in real estate assets?
Profitability in real estate assets is obtained in two main ways: through the appreciation of the place and the rental income of the space.
Appreciation is the increase in the price of the property over time. This can occur due to several factors, such as an improving economy, changing demand, or the location of the property. Appreciation can generate long-term returns for investors.
Space rental income is the final profit that the investor earns from the monthly, annual or other period-specific rental of the asset less the costs associated with the operation of the asset in which it was invested.
What does a professional real estate asset manager do?
This manager, also known as an asset manager, is dedicated to the professional administration of a real estate investment fund. In addition, he is an expert who has national and international experience and is part of a structured company. As a result, it helps clients find and manage the best real estate investments.
Investment alternatives in real estate assets
There are many ways that investors can hold real estate assets, some of the most important options are as follows:
- Investing in an investment fund: depositing money in a real estate investment fund helps you own a tangible asset, without having to buy an individual property. In addition, investors can count on the experience of an expert.
- Investing in REITs: REITs are investment alternatives that may or may not be listed on the stock market. REITs help investors gain exposure to real estate assets without having to purchase an individual property, with the added value of having an expert professional manager serving the investor.