Are you looking for ways to diversify your asset portfolio and ensure that you’re financially stable? Investing in commercial real estate is a solid choice that often not only provides financial stability for you but for your beneficiaries in the future. There are a number of benefits to investing in commercial properties.
High Income Potential
People like Angelo Ingrassia invest in commercial properties because they have such a high income potential. Since the assets are typically secured by leases, they offer a regular income stream that you can’t guarantee with stock dividend yields. Commercial real estate typically provides an annual return on the purchase price that ranges from 6% to 12%.
Appreciation of Asset Value
Historically, investing in commercial real estate has provided appreciation that goes beyond other types of investments. Internal factors, such as proactive management, help to make the property value go up by improving the property and making it more usable and desirable. This could mean doing things such as updating the property’s infrastructure to be safer and look more modern or adding high-quality amenities that draw people in.
Builds Professional Relationships
Investing in commercial real estate helps you create two types of relationships. First, because you own a commercial property, you’ll likely run it as an LLC. When you operate as a business, your landlord-tenant relationship is more professional and creates a paper trail should any problems arise in the future.
Commercial real estate investment also allows you to network with other property owners or businesses. You can join local business associations, find Facebook groups or other groups on the internet to talk about property ownership and get tips and tricks, and provide resources and information that help your fellow property owners. This will help paint you as a respectable member of the community.
Many commercial real estate investors receive a variety of tax benefits. The most common deductions are for depreciation of the property over the years and interest expenses. You may also be eligible for non-mortgage tax deductions, provide reduced tax burdens for your beneficiaries, or receive qualified business income deductions. Remember that tax season can be quite overwhelming for commercial property owners and it’s usually not wise to do your taxes yourself. Instead, hire a professional to help ensure you receive all the deductions you’re eligible for and won’t be on the IRS’ radar for an audit.
Limited Hours of Operation
If you’re looking for a way to earn income while still maintaining a work-life balance, investing in commercial real estate is an excellent choice. Typically, when you own commercial property, you’ll only work during business hours (unless there is an emergency that requires your attention). You can also choose to install alarm systems and hire a property management team to do most of the work for you. This leaves you free to attend to other business, spend time with your family, and enjoy your life even while earning money.
Commercial real estate investment and development is a solid decision that often provides financial stability even when other types of investments are struggling. Consider your options and don’t be afraid to start small if you’re new to property investment. This way, you can work your way up and ensure you have a solid, workable plan.