Last year, the values of real estate properties rose, regardless of the sector. While the market was already appealing, this rise made the market even more appealing. The founder and president of CTK Real Estate, Chris Kamberis, said he already saw an increased interest in properties this year. The owner of this Kansas City-based Commercial Real Estate Development firm, adds that there is a great potential for big returns especially in the long turn. However, he warns the would be investors that there are also risks involved.
When looking at average 20-year returns, commercial real estate investments maintain returns at of around 9.5%, safely above the S&P 500. This is slightly lower than residential and diversified real estate ventures, which boast long-term averages of 10.6%. For investors who want exposure to the market, but are not interested in owning property, real estate investment trusts are ideal. For those who desire a more direct venture, there are not many barriers for entry regarding property; anyone with a clear strategy and enough capital can gain from the rewards of the market. According to Kamberis, this can be a pitfall, as much as it can be a benefit. Investors with solid capital behind them, but a lack of experience, may have to learn the hard way just how dynamic the market is. People can easily overlook various factors, such as the changes in regulatory laws or shifting demographics. This can make a property appear as a win at first, but in as little as 3 to 5 years, it can become a bust.
As an attractive market with a diverse range of opportunities, a lot of investors have moved to commercial real estate, as well as apartment housing making it more competitive than it has ever been in the past. Chris Kamberis says that a lot of new investors don’t realize just how challenging commercial real estate is. What one needs to succeed in the market, is experience. He adds that being familiar with legal and regulatory requirements, understanding how a property may react to downturns in the economic cycle and having the ability to adjust to changes in a particular sector are essential for success.
For those who can predict economic cycles and hold sufficient business acumen, real estate investment can be highly rewarding. The founder of CTK Real Estate states that properties can generate income for decades, thus providing a reliable and very desirable source of investment earnings. Another advantage is that real estate tends to be more stable than the stock market. The down periods, however, can be debilitating. When the entire economy falters, some sectors in real estate will stop generating income altogether, and investors need to be prepared for this. Property can also be very difficult to sell when the economy sinks. This can tie up large amounts of capital for years, such as during the 2007 to 2009 Great Recession, which is still being felt in some regions of the country today. Alternatively, with commercial or residential real estate, the actual property is likely to rise in value in the long-term. Appreciation is one reason many investors who have a lot of capital behind them focus heavily on the real estate market. Kamberis, who has been a leader in property management for decades, suggests newer investors start small. That way, they will benefit of learning from others in the field, gain real experience and make invaluable connections along the way.
Property expert, Chris Kamberis is an established leader in the commercial real estate market with over two decades of experience. As the Founder and President of CTK Real Estate, a national portfolio acquisition and development company in Kansas City, MO, he has been the driving force behind some of the most progressive and complex expansions for commercial and industrial real estate. The company’s impressive roster of past and current clients features some of the world’s biggest corporations, including Bank of America, JP Morgan Chase Bank, Fifth Third Bank, McDonald’s, Burger King, BP Products North America, and Starbucks.
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