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Local shopping plazas are often overlooked by newer investors. Some find this type of investment more complicated and involved. Market research of which shops are present in the market area, the different retail lease types, and controlling tenant mix within a shopping plaza can be overwhelming, if the investor does not have the proper team in place.
As a result, some prefer to dabble in the stock market, retirement plans, and in residential real estate. Then after they are successful or not so successful in those investment types, they generally graduate to retail. Lets discover why savvy investors like retail property.
Shopping plazas are great income investments. They bring in and throw off monthly cash flow. This is passive income that just keeps coming provided you have a decent property manager. While the media talks about struggles for fixed income managers, and many income investments are paying miserable to negative returns, shopping plaza investors are doing far better.Wealth Growth
Real estate is respected as a solid asset for wealth preservation. It can also simultaneously provide wealth growth from value. There are few types of investments which both grow in value and deliver income at the same time.
Control Over Asset Value
One of the worst things about the publicly traded stock market is that investors have absolutely zero control over the value of their assets, and never will. Retail is very different. You can add value in any market cycle. You can add value by increasing leasable space, switching up tenants, and improving positioning.
Built In Diversification
We all know that diversification is important. Few individual investors and families are really diversified. Shopping plazas can be a great way to provide organic built-in diversification. You have multiple tenants as income sources, all which will typically be in different industries. If one out of ten tanks, some of the others will probably be over-performing during that period.
It's Not Going To Change
The demands that local retail properties supply aren't going to change anytime soon. That's a factor that big time investors like Jeff Bezos and Warren Buffett have built their empires on. In good and bad times, people will need services and products found at local retail properties.
There are many investment choices available out there today. Retail property is one of the investment choices that is overlooked by new investors. The savvy investor knows the aforementioned advantages of retail property investing, and how to use this knowledge to help them prosper over traditional default investments.