I keep getting asked by clients and friend were to put their money. I am not just a Commercial Real Estate Investment Broker but an investor as well. I am not licensed to give specific recommendation and is only a blog with my personal opinion and observations as of 5/13/2020.
As an attempt to maintain liquidity there as been huge sums of money (fiat currency) printed to stim the economic issue caused by the Coronavirus 19 (COVID-19). This attempt to maintain liquidity has the USA committing to $3 trillion so far, with many other countries printing as well. Personal I think one should own asset.
Buy real asset. Precious and base Metals, Stock in companies that have a differential advantage over competitors (a patent, barrier to entry, or offsetting risk built in) In regard to real estate, buying land and income producing real estate are real assets. Properties with income create a built in offsetting risk aversion I personal like. Make sure the cost of holding and/or storing the asset is not too expensive. A good example brought to the forefront recently was owning the May securitize future Oil contract. On April 20, the May crude oil contract, representing a real asset, experienced a magnificent fallout as prices moved to the lowest level in history, dropping from $17 per barrel to -$40. (Yes, that's negative $40). The issue was storage with those having the contract finally figuring out they were going to have to take possession of the oil and put it somewhere. You need to store the oil and there was nowhere to put it, without paying a massive premium. 😊 This made it very clear that storage and maintenance costs of an assets need to always be taken into consideration before investing.
Diversify ownership globally is important as is choosing counties where government confiscation is least likely to happen. Have a company or shelter in those countries in which ownership is held. In other words, in the countries where you can hold your properties and businesses in a corporation based in the country you are in, do so. Own real assets! Back to real estate, there are tax and liability reason to hold property in specific ways, but you can own property in your name only if you wish.
I can only write regarding the and easy of owning property in the USA vs other countries I have been. In each of these counties I needed a partner in that country in order to purchase property. In the USA, anyone from any country can buy US properties with few exceptions. Perhaps one reason is the USA is a country that has been built from immigration from around the world. The USA is a melting pot of those coming from other countries. The original American’s were the American India’s. Only 1.6% of the USA population is American Indian and a huge percentage of this 1.6% have 1/3 or less American Indian blood running through their vanes. The country in which the most American’s ancestors came only represent 15%. The USA is truly a melting pot of people and cultures.
Since this is a real estate blog let me suggest what I like regarding using US real estates as Purchasing Power Protection.
Apartments (high end with clients with money or lower end that is supplemented by Government)
Retail in strategic spot (Location, Location, Location)
Demographically; as senior housing and long-term care senior care facilities. I was recommending by universities for student housing. Right now this is out of favor as there looks to be a shift to on line. However this may create a short term buying opportunity if bought right.
Industrial: As build and buy in America seems to be back
Research and Biomed
Selective medical building
Things change, but good properties will always be in demand. I like to buy with a little leverage since interest rates are so low but want all my investor clients to be able to handle the eb and flow of their investment property while it increases in value. As the printing of fiat currency continues, inflation will come along sooner or later. We just need to be clear what the holding and maintenance costs are on your specific investment.
If you are thinking about buying USA investment properties, let’s talk.