Five Benefits of Investing in Commercial Real Estate

Why invest in reits

As the property market and the overall economy steadily improve, you may find yourself wondering about the benefits of investing in commercial real estate. “Should I invest in property?” you ask yourself. “Do I know how to invest in a REIT?” While every case is unique, for many people, the answer is yes: there are a number of benefits to investing in property that real estate investors can take advantage of. Read on to learn about the five most common benefits of investing in commercial real estate.

You Are In Control
Unless you run your own business, you will typically spend most of your professional career answering to a boss or supervisor. Likewise, with typical investments, like stocks or mutual funds, your money is in the hands of a financial manager. By investing in property, however, you have the ability to decide everything from what property to invest in to who you will rent to and how much you will charge for rent.

Potential Appreciation
In many cases, an investor will take out a loan to help them pay for their chosen property. However, because it is possible to increase a property’s value through renovations and other changes, you can increase the worth of your investment while making enough to pay back the loan.

Owning a rental property will obviously mean paying for maintenance, mortgages and other costs. However, as long as you charge your tenant a fair but profitable amount for rent, you can ensure that you will make money every month. Additionally, profit from sales, parking fees, vending fees, tax benefits or credits will only increase this amount.

Your Tenants Can Help You Pay Off a Mortgage
Typically, mortgage payments will remain the same amount for the duration of the loan. A portion of this payment will go towards interest, the other half goes towards the principal. However, as time goes by, the amount that goes towards the interest decreases, and the amount that goes towards the principal increases. Because your tenant’s rent payments are designed to help cover this amount, you can slowly reduce your debt while increasing your personal wealth. When the mortgage is paid off, you can further increase this profit by selling the property or refinancing the building.

Tax Benefits
As the owner of rental property, you can access significant tax deductions and write off everything from insurance and maintenance fees to property taxes. Additionally, the government often allows you to depreciate your purchase price of the mortgage even if the property is increasing in value.

If you’re wondering “should I invest in property?” you likely aren’t alone: this choice is a big step and should be carefully considered to avoid financial difficulties or commitments you simply don’t have the time to manage properly. However, if you believe this choice could benefit you, it may be helpful to speak to a real estate investment firm, such as American Real Estate Partners, to help you find the best opportunities for you. American Real Estate Partner’s President, Brian L. Katz, and its many employees have years of experience in real estate investment and can help you succeed as well. If you have decided that the answer to your question “should I invest in property” is a resounding “yes!”, contact a real estate investment firm today.
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