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How to Harness the Power of Your Real Estate Portfolio
September 26 | 2016

The Power of Your Real Estate Portfolio 

Having a real estate portfolio may make you feel like a smart investor. After all, real estate has long been a fairly reliable way to build wealth—Forbes calls it “the third-largest source of wealth among the ultra rich—and numerous tax advantages only sweeten the deal. But even owning lots of property doesn’t guarantee a high-performing portfolio, or one that’s immune to changing market conditions.

So, how do you potentially optimize the return on your property investments—and harness the power of your real estate portfolio?  

Diversity is key.

When conditions change, so does demand for different types of real estate. Accordingly, it makes sense to mix up your portfolio by including property of different types, located in different areas and valued at different price points. Holding look-alike properties can hold your portfolio back—and undermine the “get rich through real estate” dream. 

Investing in the aforementioned property mix, while having  your ear to the ground so you know which markets are growing (most likely to perform well) and which have matured (the thrill is gone), can be a great portfolio diversification recipe. Oh and don’t forget about having good management in place to keep things running smoothly on the ground. While this may be challenging, somewhat stressful and time-consuming, it is totally doable, right?

Or, you can trust the experts to do all the above for you.

One way to reap the potential rewards and minimize the challenges of property ownership is through passive real estate investing. Why not let the pros do all the heavy lifting when it comes to vetting properties, along with all the financing, managing and even reporting aspects of owning numerous properties? This will free your time to enjoy the benefits of being a commercial real estate owner.

Through passive real estate investing tools like crowdfunding, you can tap the “power of the crowd,” like-minded investors who share the returns and the risk. And you can benefit from the expertise of real estate, finance and technology gurus—like those behind an industry leader like RealtyMogul.com—while gaining access to a powerful real estate diversification tool: real estate investment trusts. Known as REITs, these funds not only enable you to invest in commercial real estate, but to own a variety of it—bringing diversity to your portfolio and providing you income streams in the form of rental payments.  

Investing in commercial real estate can be a great way to diversify.

Investing in different types of commercial real estate properties, each with different economic drivers, is the perfect way to avoid holding look-alike properties that can make your real estate portfolio vulnerable. In general, commercial properties include:

  • Office property -- Can be classified as Class A, B or C, depending on construction quality and location (A being best of both worlds), Central Business District (or “CBD,” such as downtown high rises in medium and larger cities) and suburban office buildings (campus-like office parks in the ‘burbs). 
  • Industrial property -- Includes heavy manufacturing, light assembly, flex warehouse (a mix of industrial and office space) and bulk warehouse (e.g., distribution centers).
  • Retail property -- Can consist of small (strip) to large (“power”) shopping centers, regional malls and out parcels, which are parcels of land within a center that are leased to individual tenants, like banks or fast-food places.
  • Multifamily – Properties like suburban garden apartments, urban midrise apartments and professionally-managed high-rise apartments that are found in larger markets.  
  • Self-Storage – A property with storage units or spaces that are rented to tenants, often on a monthly basis.

Recently, RealtyMogul.com announced the launch of MogulREIT I, its first crowdfunded REIT. Designed to offer investors single investment access to a diversified pool of commercial real estate with minimum investments as low as $2,500, MogulREIT I seeks to democratize real estate investing. And because of the exclusive and direct access it gives investors to the product, the fund can do so at a low cost—investors pay no sales commission and other upfront costs are estimated at only 3%.

Says RealtyMogul.com CEO Jilliene Helman, “Beyond the zero commissions and lower fees, the fund’s strategy is exciting because it allows us to leverage RealtyMogul.com’s hundreds of inbound inquiries for financing on commercial real estate and curate them to find suitable opportunities.” Keep in mind that real estate investing has risks, including risk of loss, and is not suitable for all investors.

With MogulREIT I, the timing is even better to consider “joining the crowd” at RealtyMogul.com and diversifying your portfolio through REIT investment. For more information on MogulREIT, contact us today.

 

Written by , CEO and Co-Founder of RealtyMogul.com

Jilliene is the CEO and Co-Founder of RealtyMogul.com and is responsible for the company’s strategic direction and operations. Jilliene, who sits on RealtyMogul.com’s board, has underwritten over $5 billion of real estate and was previously a Vice President at Union Bank, where she spent time in Wealth Management, Finance and Risk Management. Jilliene is a Certified Wealth Strategist®, holds Series 7, Series 63, and Series 24 licenses and has a degree in Business from Georgetown University.

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