In today’s weakening real estate market, top quality tenants in common properties are more important to real estate investors than ever before.

 

During the past 18 months most investors have taken hits on all their investments – firIn st, real estate; then, the stock market; and now, yields on cash in both bank CDs and US Treasuries extend to new lows.

 

But history has shown that even in a weakening real estate market, class A properties maintain their values better than any class B or C properties.

 

Properties that are top quality and larger ($20-$50M in total value) with luxury amenities that are close to the most and best employers, the best schools, the greatest variety and type of grocery, retail shopping and community amenities always perform better in strong markets and in weak.  Such properties, although larger and more expensive, are more substantial and more attractive and actually offer the best value to the tenants, both residential and retail.

 

And the reason that the largest, class A properties perform better is because they attract a higher quality of tenant – those that can most easily pay their leases and rent increases.  Such tenants remain loyal to this class and institutional size of property because they are thriving there.  These high quality tenants enable you to feel safer and more secure in your investments – because you are.

 

Even in today’s challenging environment, it’s no surprise that the strongest, most conservatively underwritten and managed tenants in common properties are succeeding for their cash investors and 1031 exchangors.

WHAT TO DO NOW

Smart investors are selling their properties for whatever they can get – right now – while we are still only slightly off the all-time highs in real estate prices.

 

So if you can sell all your properties now and exchange into much bigger, better and higher quality TIC properties that start paying immediately, you can easily make up for lower selling prices on your current properties by earning the extra tax-sheltered income you will receive as soon as you close on your new TIC properties.

 

Your new TIC property will protect your equity much better than any other type of real estate investment.  It also provides the huge tax benefits of a 1031 exchange, and you get all that quality, safety and income with no ownership or management hassles.

 

As an investor, don’t become so discouraged that you become frozen.  In a declining real estate market, time is of the essence.  It is still possible to find great tenants in common investment properties that have withstood, and will withstand the test of quality and of time – through up cycles and down.

 

Such properties, conservatively underwritten and using the best and most conservative available financing, offer the most sound and high value real estate investment that you can make today.  As a tenants in common co-owner, you’ll discover that it is the best real estate investment there is – one with which you will feel comfortable, safe and secure.

Article by: Ken Yamaguchi