Real estate as an investment class continues to trend upward, with investors clamoring for higher yields and owners that may want to take some gains and redeploy their profits.
Aside from the tax benefits available to owners of real estate, there are other tangible benefits as well. For the user/owner, a property can be a headquarters, as well as a way to reduce occupancy cost by becoming a landlord to others in the same property.
Outsourced management can remove the day-to-day management headaches and property held as an investment can diversify a portfolio of “softer” investments. Borrowing capital to finance real estate is still relatively inexpensive.
The Baltimore-Washington corridor continues to attract investors because of the area’s efficient infrastructure, strong job growth and prospects for the future. This sense of optimism is fueling buyers’ perception of the stability of the area’s real estate market. The supply of commercially-zoned land is constrained by local municipalities, which has the effect of putting upward pressure on prices of “ready to use” real estate. Buyers have to be clever, patient or both to secure real estate that meets their needs for utilization future investment.
Conversely, sellers are sensing that a unique opportunity exists to reap what they have sown through years of ownership. Through a professional, well-conceived and executed marketing strategy, new highs are being reached every month in terms of prices properties have generated. While most sellers will agree they are not “market timers,” they are correct in assesing that the market is strong, but no one knows exactly how long it will last. Their main concern will be how to deploy the profits from a sale.
The fundamentals for real estate investing continue to be strong and the demand side of the equation has not yet been satisfied. Capital is readily available from various sources, and now is a good time for investors considering real estate as an investment class to “begin at the beginning”: get sound advice and sturdy execution from a real estate professional.