Top 5 Advantages of Owning Commercial Real Estate Owning a commercial or industrial real estate can work wonders for your investment portfolio. Industrial real estate loans have made it easy for investors to get started on their journey of real estate investment. Commercial real estate offers great risk/reward to its investors. Let’s have a look at the chief methods in which investing in commercial real estate can help in your wealth growth: Significant Current Income One of the chief advantages of commercial real estate investment is that the assets get secured by leases that offer a regular stream of income which is pretty high compared to general stock dividends. Outstanding Asset Value Appreciation Investments in commercial real estate have always equipped individuals with great appreciation in value that not only met but exceeded other kinds of investments. Properties generally rise in value from factors like proactive management. Proactive management includes making cost-efficient improvements to the property that boost the desirability and usability of the asset and external factors like imbalances in demand and supply. Industrial real estate loans make way for investors to make the most of asset value appreciation and boost their income levels. Accrue Substantial Equity via Leverage One of the most vital aspects of commercial real estate investing includes the capacity to place debt on the asset which is multiple times the original equity. This permits you to purchase more assets with less money and substantially boost your equity when loans get paid. Get Hedge Against Inflation As compared to other asset classes, commercial real estate investments have the highest correlation to inflation. As Asia, Europe and the United States keep on carrying out policies to
make more money to improve economic growth, knowing the advantages of owning real estate as a hedge against inflation can prove to be beneficial for you.
When inflation occurs, the price of real estate assets, especially multi-tenant assets that come with a high ratio of labor and replacement costs also increase. This is the reason why a lot of people consider multifamily loans to get maximum returns from their real estate investments and save themselves from the harmful effects of inflation. Tax benefits Real estate owners benefit in multiple ways from the US Tax code. Depreciation deductions and mortgage interest can safeguard a huge portion of your income stream. It is advisable to get in touch with your tax advisor to understand the distinct tax benefits.