Commercial real estate offers great risks and rewards. Here are some tips from Irwin Tauber, President & CEO of Taubco in South Florida.
Commercial real estate offers rewards and risks. According to developer and investor Irwin Tauber, investors who seize opportunities while managing risk often do very well. Below, we give you a quick rundown of the risk and rewards so that you can take advantage of the good while hopefully avoiding the bad.
Irwin Tauber Examines the Clear Rewards of Real Estate Development
Commercial real estate investment does not require formal education. However, those who take it seriously are always trying to learn more about the market and how to move their projects forward. If you’re willing to learn from professionals in the field and do some research yourself, the sky’s the limit, says Irwin Tauber, President, and CEO of Taubco.
Here are some of the benefits of choosing this type of investment:
There are a great variety of opportunities. Properties range from multi-unit dwellings to shopping centers. This gives you a great deal of flexibility in how you will make your profits.
You can use other people’s money to finance your dreams. This is called leverage, and real estate investors rely on capital supplied by financial institutions and investors to complete development projects, says Irwin Tauber.
Commercial real estate development offers excellent returns despite the risk. Unlike the stock market, commercial real estate experiences fewer volatile fluctuations.
When you develop real estate, your properties experience long-term appreciation. They increase in value consistently. Commercial real estate development includes office buildings and apartment buildings that generate income for years or decades to come.
Many people come into the business by working with a mentor or financial advisor to figure out how commercial real estate can build their wealth. By making significant decisions and taking advantage of tax breaks, you can generate wealth and plan for retirement as well as your other financial goals, according to Irwin Tauber.
Irwin Tauber Advises Caution When Choosing Real Estate Development Investments
There are risks associated with developing commercial real estate. Because it takes a lot of money to buy land and build large properties such as shopping centers and apartment buildings, you will have to leverage yourself or your company heavily in the beginning, warns Irwin Tauber.
Some of the risks associated with commercial real estate development include the following:
Commercial real estate development is full of experienced investors. Irwin Tauber suggests starting with small investments that can help you learn as you go. Some investors join a firm specializing in this type of development to learn the ropes before going out on their own.
Real estate development requires a lot of capital. Without proof of capital, you won’t make it far. So, the first couple of deals might not go as quickly as you would like. Establish relationships with financial institutions that know the year track record going forward. This can help you secure funds more quickly.
Development projects can tie up capital for months or years. You will need reserves to ensure that you can complete the project and start new ones as your business grows.
Despite occasional economic downturns, Irwin Tauber would not be in any other business. It’s an exciting way of making a living, and you have a real impact on the market when successful.