We're not telling you what to do, all we're saying is commercial real estate tends to have great returns.
Investment properties give you the opportunity to earn good returns (no - scratch that. GREAT returns). CRE provides a steady cash flow, opportunities for asset value appreciation, equity gain and we can't forget one of the favorites - tax benefits!
So what does all this mean to someone who's considering dabbling in commercial real estate? It's means CRE can be totally worth all the effort it requires.
Interested to know more of what we're talking about? Lets break it down further.
This one is the most obvious of them all (and the typical reason) for someone to bust into the commercial real estate scene in the first place.. The money.
Investment properties are a way to continue to earn money on your investment, for the long run. The whole idea is that eventually your investment will pay for itself - and then some. The amount of work that is required of some real estate can change from property to property.
It can be more or less work given the existing condition that it's in. You can also reduce your workload by hiring someone to oversee the maintenance for you but that clearly comes with a higher price tag. It's all dependent upon the characteristics of each property.
Steady Cash Flow
One exciting stipulation of renting is that your renter is contractually obligated to pay you a set amount, each month.
That means there's no guess work in how much you're going to make and there's minimal to no work involved in earning that money. Steady cash flow is something that quite a few of us can appreciate once we've experienced a fluctuating paycheck (which we almost all have at one point or another).
Steady cash flow = a good month for you.
Asset Value Appreciation
Overtime, the value of your investment can increase based on multiple factors:
Land - The value of the land where your property sits can sometimes be worth more than the place itself.
Location - Where your property is located has a huge impact on the value.
Curb Appeal - If it's perceived, it exists. If a property doesn't look good from the curb, what are the chances someone will want to take a step inside?
Windows & Doors - Natural light is a valued feature. If you can find it in your budget and capacity to add some windows and/or doors (where appropriate), you can potentially boost the value of your property.
Embellishments - Crown molding looks great. Looks great = pays great.
Insulation - Decreases the outside noise, increases the value.
It's important to note that the above factors aren't the only items that are important in determining the value of a property, but they're some of the items that can surely boost a property's value. Use this information to your benefit.
As the market fluctuates between a buyers and sellers market, CRE investors have the opportunity to cash in big on properties. Buying when the market is low and selling when it's high (this cycle can last up to a few years), can help investors make the most of the investment and earn big on selling at the right time.
Owning real estate can provide many tax benefits. It's best to consult a professional to best understand how they can/will specifically effect your taxes.
As there are many financially rewarding reasons to break into the commercial real estate industry, it's important to consider everything that one must do to become a successful investor.
If you'd like to learn more about property investments, challenges, benefits or anything in between, give us a call today.
Our staff has been working with real estate investors for decades and we are happy to share our insights and information with you. Reach us by phone at 773.786.0067 or leave us a note with any questions you have. We're here to help you!
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