In a world where more than half of all professional basketball players file for personal bankruptcy within five years of hanging up their jerseys, investors worldwide have to wonder whether the only blueprint available to sports celebs is one that outlines endless ways to squander millions.
While there are some savvy professional athletes who have built impressive real estate portfolios, and some who have leveraged tech investing into a solid career, celebrities in general could benefit from consultation with professional commercial real estate investment firms to handle their finances. As commercial properties continue to post strong returns, the rate of new investors looking into how to invest in a REIT should continue to increase sharply.
REITs, or real estate investment trusts, are professionally-managed commercial real estate investment portfolios. Investors who wonder how to invest in an REIT may be pleasantly surprised to discover that commercial real estate typically returns close to 10%. In general, REITs are quickly gaining a reputation as a desirable long-term investment option. A real estate market that shows little sign of slowing down has investors considering how to invest in a REIT; buy-in rates may vary according to location and strength of existing portfolios.
Commercial real estate investors often start with stakes in the thousands of dollars, but having the ability to navigate a strong real estate market can allow for a substantial return on investment. With more than $150 billion in properties up for purchase due to foreclosure, commercial real estate partners may be facing unprecedented opportunities for expansion and consolidation.
Studies show that most malls are owned by real estate investment groups, and that there is also impressive potential for income from residential properties in larger urban areas. As job seekers move to cities in search of work and entertainment, prices for residential and commercial rentals continue to rise. Why invest in REITs? Building stable portfolios with a high return is never a bad idea. How to invest in a REIT may be as simple as an exploratory conversation with current investment teams.
In general, fixed income portfolios have a rate of return that hovers near 7.5%, and commodities average less than a 5% return. Over the last two decades, studies show that real estate performed poorly in two fiscal years, but that fixed income returns bottomed out three times as often. Although experts recommend mixed portfolios, the draw toward commercial real estate is both practical and financially sound, given statistical studies that stretch for more than 20 years.
The most successful — and wealthy — athletes often seek extensive franchise holdings after they retire from the public view. Laundromats, fast food and restaurant properties, car washes, and other smaller commercial properties may generate relatively small profits individually, but can collectively generate millions when purchased in sufficient quantities.
If the future of American investment hangs on commercial properties — and tech stocks, to a very large extent — what does a truly balanced modern investment portfolio look like? While the percentage of professional athletes who have translated their success on the court into long-term, regenerative wealth may be small at present, younger athletes and celebrities who maintain heavy focus on commercial investments are poised to re-write the investment playbook altogether.