In this article we assume you have identified a property to invest in. You have also started the negotiation process but don’t know what warning signs to look out for. This article will serve as an aid, outlining the aspects you need to be wary of before you sign on the dotted line.
History and evolution There is a long history of institutional investment in real estate both through direct ownership of property and through pooled investment funds. Initially institutional real estate investments were in core real estate, however, market conditions in the early 1990s led to the emergence of opportunistic funds which aimed to take advantage of falling property prices to acquire assets at significant discounts.[1] Private equity real estate emerged as an independent asset class in the beginning of the 21st century and has experienced huge growth in recent years. Strategies Private equity real estate funds generally follow core-plus, value added, or opportunistic strategies when making investment’s.
The answer is simple; use, use and use. Use is possibly the most important factor in terms of the property?s value. For your investment to be a success, you need to think of the building?s use for you as well as for your tenants. Hence, you need to also put yourself in the shoes of your customers, i.e. your tenants. To kick start things, first attain information on the demographics of the area in which you want to invest in. This should give you a basic idea of who your target audience is and will also allow you to build a general profile of your typical tenant.
