The Benefits of Investing in Commercial Real Estate
When you’re thinking of investing your money, stocks, bonds, or mutual funds may come to mind. While these are all great ways to make your money work for you, commercial real estate investing can offer a layer of diversification that not only appreciates but lessens your risk. Join us as we explore the benefits of CRE investment.
Tremendous Leverage Opportunity
A commercial building that is sound means that financial institutions will be willing to compete to give you financing. This makes it easier for you to pay off your mortgage while your ROI is being paid by the rent your tenants pay.
Less Risk, Long-Term Profits
Commercial real estate is actually a lot less risky than other types of investments. The freedom of being able to secure 3- to 5-year lease contracts can provide long-term profits even in the face of future economic volatility. This is because CRE offers the opportunity for the acquisition of highly secure tangible assets through property ownership.
A Faster Return
Investments in CRE offer many opportunities for profit. Rental income can provide you with a faster return on your investment. As well, commercial real estate investment allows you to raise rents more significantly than residential real estate ownership would.
It Will Appreciate in Value
If your commercial property has a great location with lots of development potential, appreciation is virtually inevitable. As well, when a business moves to that local area, the demand for housing will increase and, with it, retail demands for your property. Together, these items can result in the kind of appreciation that generates a high income for you.
CRE Ownership Provides Tax Advantages
Investment in products like stocks and bonds will require you to set money aside for the payment of taxes on your capital gains. With commercial real estate investing, you can lessen the amount of capital gains you pay and even eliminate them completely. There are many ways to accomplish this, including postponing your profits from a property sale with a 1031 tax-deferred exchange.
In addition, you can also get tax incentives from the IRS on the money you spend on the maintenance and upkeep of your property.
It’s a Great Way to Offset Inflation Impact
When inflation hits other investments like stocks and bonds, smaller returns over time can be the result. Not so with commercial real estate—thanks to the fact that you can adjust commercial rents with inflation, you can offset its impact over the long term.
Secure Your Returns with CRE
The lower-risk, long-term profits and appreciation of commercial property make it a lucrative investment opportunity, but can it work for you? answering this question, take a sazzy minded real estate deal shaper train and skilled in the art of real estate brokerage. The TB-RE team offers experience and years of industry knowledge to help you plot a course that improves your bottom line. To learn more about our full-service commercial real estate solutions, call (312) 473-1764.