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With any B-Plan Purchase
425 Page Capital Directory
Through Apr. 30


Custom Business Plan
$425 Flat Rate
No Templates Used
7 Day Turnaround

All Purchased Plans
Are Updated for 2017

Real Estate Investment Firm SWOT Analysis

 

Strengths

 

No matter what, people are going to need places to live and businesses are going to need spaces to sell their goods and services. As such, and in almost any economic climate, real estate investment firms are able to remain profitable and cash flow positive. There are also a tremendous number of tax benefits (including depreciation) that are applied to residential, commercial, mixed use, and industrial real estate. Additionally, almost all income generated from real estate investments is done on a contractual basis. Highly experienced real estate investors are able to profit in both rising and falling property markets.

 

Weaknesses

 

One of the primary weaknesses related to real estate investment firms is that their profitability is very closely tied to the prevailing interest rate. Competition is not really a factor given that real estate is an extremely free market oriented business. Additionally, there are a substantial number of regulations (especially for residential real estate) that must be complied with on an ongoing basis. Vacancy of units is also a continued issue that real estate investment firms must face as they progress through their operations.

 

Opportunities

 

Generally, most real estate investment firms expand by reinvesting their after-tax profits into property acquisitions and developments. From time to time, firms may also seek to syndicate real estate investments with third parties via joint ventures and/or limited partnerships. For established companies, they may hypothecate their existing property base in order to acquire additional capital. However, this carries some risks given that additional leverage is being used to acquire income producing properties. Again, given the highly free market nature of real estate investing - there are a number of creative ways that these deals can be financed.

 

Threats

 

There are two primary threats faced by real estate investment firms. First, these businesses can face issues relating to the economy in general (rising interest rates) and tightening of lending. Second, changes in the local economy where a property is located can tank the value of an income producing property. As such, it is imperative that the principals of real estate investing firms complete extensive due diligence in order to ensure economic stability.


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