Why invest real estate globally
Why invest real estate globally
Global commercial real estate can offer a hedge against inflation and a safe harbor especially when other countries and other sectors of the industry are not doing well.
US is the lead in providing securitization of real estate assets through public and privately traded REITs (Real Estate Investment Trusts). Through this investment vehicle, you can be like Trump only you can invest small minimums into various types of commercial properties such as hotels, shopping centers, office buildings, warehouses, etc…
So picture this in a global situation. The potential is huge! Those more developed countries have caught on to this trend just few years ago which means lots of deals are in the works. The Emerging Markets (less developed countries) have yet able to make these offerings due to the inability to securitize property rights. However, with the estimated economy (9% annually growth rate in China) and population growth both in China and India, more buildings will be built to accommodate the growth demand hence public and privately traded REITs will surface.
Where/How to invest
Direct ownership certainly is one way to participate in the global real estate market. But buying an ocean front condo in France will be costly and you’ll have to play by their government and cultural rules. To capture the advantage of commercial real estate benefit maybe nearly impossible unless you’re The Donald.
So what can you do to participate in this growth? You can invest in individual securities, an Exchange Traded Fund (ETF) meaning an index fund, private equities, or a global real estate mutual fund. For most of us, ETFs or mutual fund is the best way to get started because of diversification to limit your risk exposure compare to individual securities or private equities.
Where to you start
Van Kempen has a global real estate that I recently put some money into. Via Fidelity site, you can find a nice long list of real estate funds.
Self disclaimer: I don’t work for the above mentioned companies nor I can paid mentioning them. This is just information written for Flippingrich readers to help understand the vast markets.
