Commercial Real Estate Investing for High Net Worth Individuals

by : Kris Koonar

High net worth individuals can afford to play a bigger game and can also earn huge profits through investing in Commercial Real Estate. But the risks too assume greater proportions and with the real estate market subdued all across the United States and parts of Europe, the market has now become a double edged sword, with one side offering properties at subdued rates and the other side offering no guarantees that the prices will rise after one has purchased the property.

For High net worth individuals, there are various choices of picking up properties such as hotels, complete commercial office buildings, properties where existing malls are situated or even purchasing land and constructing any of the above over it. After purchasing it too, the individual has a choice of either renting it out or selling it off to a higher bidder.

If you are one such budding high net worth investor, then you could conduct a survey on the purchase and sale route that you want to follow. If budget is not a problem, then you should go in for the best property available because not many people might be able to afford purchasing a high value property and this could give you some leverage in knocking off some amount over the seller's asking price.

Since the transaction value will be high, it is better to employ a team of skilled tax attorneys, accounting consultants, etc, so that there is no legal or financial hurdle in the deal. You can conduct research on the high and the low price band the property has touched and check out the graph. In case the property has shown an almost steady incline, then you could safely invest in that property, but take the data of the previous six months into consideration because that was the time when the property market had entered into a downward spiral.

There are many areas in the US and UK, where prices have not reduced even though the surrounding neighborhoods had shown negative growth. You can check out the areas since the chances in the value of property in that particular area going down are slim.

If you are planning to purchase properties such as a hotel or mall and then either run it yourself or rent it out, then accordingly, you will need the services of experts in the field. Some prior experience in that field will definitely be an advantage. As a high net worth individual, you might also be able to secure a loan quite easily, but the high interest rates especially in the UK could mean an additional drain on your finances. For malls, you will need to identify a high human traffic area along with ample parking space. High value commercial properties should always be based in a low crime area, since that could affect the successful running and future appreciation of your property.

High value commercial properties can give you excellent returns as compared to residential properties, which have become stagnant in their returns. Depending on your budget, you could now even purchase entire islands and either sell them or rent them out to celebrities. With so many millionaires being added to the existing list, there are many avenues which can be explored and the possibility of earning huge profits is very much possible if you have done your homework properly.