Investing in real estate can be one of the best ways to earn a return on your available capital. While residential properties have a lot to offer, you may want to consider commercial real estate. If you are like many aspiring real estate investors, commercial properties seem foreign. However, they are worth learning about thanks to the following five benefits.
1) High Potential Returns
Perhaps the best reason to consider investing in a commercial property is the large potential for returns. The most immediate return comes from commercial leases. If you have a multiunit property, the revenue generated from rentals can be significant.
Additionally, you will own the capital value of the asset. If it is in the right location, this can also provide a good return as it appreciates.
2) Many Financing Options
There are a lot of loan options for paying for commercial property. These include commercial mortgages, hard money loans, private loans and stated income loans. With the right financing, you can help to ensure that your investment will provide a strong return. Understanding the financing options is one of the most important parts of real estate investing.
3) Easy Management
You can typically hire a property manager to handle most of your landlord duties. If you invest (or co-invest) in a multi-unit commercial property, the management costs can often be easily covered by the rents. Even if you have a single unit, you can likely work with a management company for part-time services. This means that you barely have to lift a finger for your commercial property.
4) Tax Advantages
Investing in real estate often has some tax advantages compared to other investment options. For example, certain locations are tax-advantaged. You may also be able to reduce your taxes through depreciation. With the help of a good tax accountant, you can maximize your return on investment by taking advantage of all relevant tax options.
5) Relatively Low Risk
Overall, the risk from a commercial property investment is low. Long-term rents tend to be very reliable, especially from commercial customers. Additionally, the property itself will retain value. In short, you can make this investment and feel confident that the upside is much larger than the potential downside. Compared to other investment options such as stocks, that is a great deal.
Learn more today about commercial real estate investing. This may be your path to lasting success.