Real estate is, and will continue to be, a dominant means of investing and saving. Most real estate is comprised of owner-occupied residential real estate, frequently acquired as part of a mortgage. On this basis residential real estate represents the lion’s share of most people’s wealth, while at the same time not being treated as an “investment”. Tying a large disproportionate amount of one’s wealth to residential real estate and debt carries a number of risks, which mortgage borrowers are rarely encouraged to question.
The team at Crowdipy aims to help people make more informed real estate investment decisions by providing clear information, presented in a transparent and unambiguous manner. With excessive investment already available in residential real estate, Crowdipy’s focus is on commercial real estate, and specifically the single-tenant sector. The single-tenant sector, comprising commercial property fully leased to one company, is very well suited for long term income investments, as set out below.
Commercial real estate offers many investment benefits that are simply not available in residential investments. Some examples are as follows:
- Leases in commercial real estate are longer than residential leases (averaging 10+ years for single-tenant buildings)
- The commercial real estate market is very liquid and the rate of change of ownership (velocity) is greater than that in the real estate market
- Inflation-tied lease contracts and rents
- Tenants hold most maintenance obligations
- Economise of scale
- Secure leases with larger corporate entities