6 Practical Reasons to Invest in Commercial Properties
There’s a reason why most successful entrepreneurs invest in commercial real estate. It’s a strategy that practically ensures wealth continues to grow no matter the stock market trends or political winds. In the Dallas/Fort Worth area commercial real estate investing opportunities abound like never before. Here are six reasons why you should consider investing in commercial real estate today more than ever.
1. Dependable Income in Uncertain Times.
2020 has been a year like no other. Many have seen their fortunes slip as businesses cut back, furlough employees, and even shut down. Investing in commercial real estate secures long-term passive income to make it through the tough times. Commercial Real Estate assets are generally secured by leases that provide a regular income stream, significantly higher than typical stock dividend yields.
2. Superior Appreciation of your Investment.
Properties generally increase in value due to one of two factors: internal factors such as making cost-effective improvements to the property that improve its usability and desirability of the asset; And external factors such as supply and demand imbalances. Either way, it’s the investor that comes out ahead
3. Leveraging Debt to accumulate Significant Equity.
Not all debt is bad. Commercial Real Estate Investing enables the entrepreneur to place debt on an asset that is several times its original equity. This allows them to buy more assets with less money and significantly multiply their equity as the loans are paid down.
4. Provides a Hedge Against Inflation.
According to recent reports, commercial real estate investments had the highest correlation to inflation when compared to other asset classes such as the S&P 500, 10-year treasuries, and corporate bonds. Generally speaking, when inflation occurs, the price of real estate will also rise.
5. Tax Benefits.
The US tax code benefits real estate owners in a number of ways. Mortgage interest and depreciation deductions can shield a large portion of the investor’s income stream. To fully capitalize on this advantage, experts recommend that investors consult with a tax advisor to understand all of their options and possible benefits.
6. Unique Security of Investment.
Commercial Real Estate is one of the few investment classes that is a hard asset with a meaningful intrinsic value. The property’s land has value, as well as the structure itself. By choosing the location and asset quality wisely, investors have the potential to earn income regardless of what happens to the existing tenants. This is the reason commercial real estate investments do not fluctuate with the same volatility as the stock market.
LINC Commercial Realty is a full-service commercial real estate brokerage with unparalleled insight into the Dallas/Fort Worth area. Their commercial real estate investing team will listen to your goals and help make them a reality. Visit the LINC website today to see how their experts can help you.