Why Should I Invest In Commercial Real Estate?
Commercial Real Estate… A Secure Investment
Buying commercial real estate can be a secure and profitable investment if you take the time to research, get advice from experts, and know your risks and benefits. There are four main reasons to buy investment real estate: cash flow, appreciation, tax savings, and principal pay-down.
Owning commercial real estate can be a great way to diversify your portfolio, create tax benefits and build wealth. However, buying commercial real estate can be a risky business, especially these days, when many people are getting into real estate without completely understanding the industry.
There are different types of investors. Some will buy property with minimal cash flows, but have a long-term hold philosophy driven by appreciation. Other investors want dependable monthly cash flow and will accept modest appreciation. After a careful analysis, we can tailor our offerings to meet your particular needs.
Use Industry Experts
Whether you are at the beginning stages of looking for commercial properties or you have settled on one with tenants in the property, it is a good idea to get advice and seek the help of industry experts. Commercial Agents and Property Management firms can help guide you through the process. If you are smart, hire a good management company and let them do what they do best. You may get a little less return, a little less cash flow, but you are still going to get all the other benefits of owning commercial real estate and minimize your risk.
Know the demographics for the surrounding area
You want to know what the incomes are, for example, within a radius of five miles, what is the average household income, average age, the breakdown of ethnicities, etc. Moreover, if it is a freeway frontage property, how many cars are going past that property per day? All of these factors are important in determining the future growth of a particular area. Long and Foster Commercial has an extensive list of proprietary products that allow us to provide our clients with the most up to date information and technology.
Study the lease risks
Determining the leasing risk is important in any real estate decision. Information concerning current and expected vacancy and leasing rates, tenant credit worthiness, and renewal options are important to any real estate investment decision. Our experts will take you systematically through the process so you have a thorough understanding of the issues that may affect your investment.
Over time real estate has been a proven winner over other Investment Alternatives.
Superior Cash Flows to Stocks and Bonds.
• Hedge against Inflation.
• Investment upside.
• Depreciation of Improvements.
• Deductibility of Interest Expense.
• Ability to finance.
• Curtailment of principal through lease receipts.