What Motivates You? Part 2

Yesterday I posted some hot button issues that motivate people to invest, particularly in real estate. Today I want to wrap up the discussion. Here are a few more distinct advantages of commercial/investment real estate:

1) Diversification -- Commercial real estate offers diversification from other investments such as securities (stocks and bonds) and commodities, which have different risks.

2) Psychological Benefits -- The fact that real estate is a physical asset (i.e. - bricks and mortar) provides a certain amount of psychological security over more nonphysical assets such as securities.

3) Positive Leverage/Principal Reduction -- In many cases, an investor may obtain financing with a lower interest rate than the overall unleveraged yield of the property. This will increase the yield to equity, including reduction of the mortgage balance.