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The importance of investing in commercial real estate

Investing in real estate could give your income the boost you're looking for. Before you decide if real estate investing is right for you, you need to better understand how commercial real estate works.

Commercial real estate includes many kinds of properties such as offices, retail spaces, apartments and others. Your real estate could earn money in two ways. One is through direct income. Another is through the appreciation of the property over time.

It's important to understand that investing in commercial real estate does typically require you to have more money up front. However, it's also possible to make a significant profit from doing so. Commercial real estate generally has a risk-adjusted return, and it's a good way to diversify your investments. As long as there is a demand for property in an area, the investors make a profit. If demand falls, the building's value itself may still increase due to appreciation.

For some, rental income is the right avenue to make more money. Offices, apartment buildings and industrial structures, like warehouses, provide an opportunity to make money on a monthly basis. As the property ages, there's also a possibility of it growing in value. The amount of property in any given area is limited, increasing your chances of seeing your property's value grow significantly over time.

Overall, investing in commercial real estate is a good way to diversify your investments and bring in a monthly income while watching your investments' value grow. It's potentially a good way to grow your net worth exponentially, if you can find the right property.

Source: FundRise, "Real Estate 101: How Investing In Commercial Real Estate Works," accessed April 12, 2018

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