Benefits of Shopping Malls as Investments
Investing in retail property, particularly in shopping malls, is an idea that has been attracting more and more people in the last several years. Even though the global economy has seen better days, consumerism is still on its pinnacle, which is why retail is one of the most reliable and fastest-growing industries in the world.
Nevertheless, from the very start, it’s more than obvious that this type of investment isn’t only related to the retail industry, but to the real estate industry as well.
…. The state of the latter, on the other hand, is not as admirable.
So, with all of these factors taken into consideration, here are several reasons why investing in shopping malls is still a good idea.
1. Consistency of returns
The reason why this type of investment gives such consistency of returns is due to the fact you’re renting out the place to various vendors. This means that you’re never relying on a single rent income but always stand to receive money from multiple sources. In theory, if you were to rent out a place to a single vendor and they were to go out of business, you would have to undergo a downtime until you find a new leaseholder.
However, in this way, only a small portion of your income would ever be brought into question.
Moreover, sometimes, you’ll have a space that’s specifically built for a certain venue type. This means that, should an entire industry embark on a downward spiral, you might find yourself in a bit of trouble. As we’ve stated earlier, this methodology of investment would also insulate you from some potential financial losses that would otherwise come your way.
2. Location-based decision
In the introduction, we’ve already mentioned that you need to look at this issue from the aspect of real estate as well. Needless to say, this is where location makes all the difference. This is where the region that you aim to invest in matters the most.
For instance, the commercial property market in Hong Kong is currently at its all-time high, while this may not apply to some other countries and business hubs.
Keep in mind,
Nonetheless, that in the hyper-connected world of the 21st century, these causalities are much more likely to hold all over the globe.
3. The success rate of potential leaseholders
In the first section, we’ve talked about the situation where you have to look for a new leaseholder. In that scenario, finding a reliable partner means less downtime, more reliable income, perhaps even an expansion of partnership at one point.
First of all, you would have to improve your skills regarding the vetting process, due to the fact that this is something that you’ll have to fall back to time and time again.
Second, you’ll have to learn a thing or two about retail space architecture, which is an industry on a rapid expansion.
Finally, you’ll have to have a candid conversation with every potential leaseholder and talk about their plans, objectives and history.
4. Passive wealth building
The best part about retail property investment lies in the fact that it’s truly an opportunity to passively build wealth.
Property management is still an issue to worry about, but it’s always so when it comes to real estate investments. On the other hand, you could just outsource your property maintenance, thus slightly reducing the return but ensuring that the income you receive truly comes with as little effort as possible.
As for the maintenance,
Leaseholders have numerous responsibilities that are there to make your life substantially easier.
5. Brick and mortar investment
At the end of the day, you need to understand the fact that brick and mortar investments tend to be quite safe when compared to stocks, IPOs and cryptocurrencies. Sure, their value can drop, nonetheless, as history showed time and time again, it always comes back.
A real estate, same as a commodity, always has pragmatic value, regardless of its market worth. With all the scams and hoaxes online, this is an important thing to keep in mind.
From all the above-listed, it’s more than clear that investing in a shopping mall may be a good idea for those who have enough resources to do so. Keep in mind, nonetheless, that this is a reliable investment and as such, it won’t make you rich overnight.
Consistent returns usually take their time.