Should You Invest in Commercial Real Estate?
Though commercial real estate indeed investing is a bit different than investing in the stock market, the risks and strategies are still applicable. There are several reasons why investing in commercial real estate is appealing. One of these is that an investor can generate higher returns and take advantage of tax benefits by investing in a variety of asset classes/property types.
If investing in commercial real estate is something that interests you, keep in mind that to make a profit, you need to commit to having this asset for the long term.
Since commercial real estate is not a liquid asset, your funds may end up being tied up for some time. However, the good news is that these types of investments will typically generate higher returns, as they are not subject to the daily price fluctuations. If you prefer liquid investments, this may not be the best option for you.
On the other hand, investing in commercial real estate can be rewarding in the long run and, in this article, we’ll discuss whether or not you should invest in commercial real estate.
Should You Invest in Commercial Real Estate Now
At this time, the economic climate is ideal for beginning your investment journey into commercial real estate- especially since interest rates are historically low.
According to the experts, you can borrow the money to purchase a $200,000 property with a small down payment. The leverage that comes with low-interest money is great because you can use money from others to compound your own.
Investors that take advantage of the low-interest rates today can lock in that rate for some time. Additionally, it’s possible to remove ‘interest rate risk’ for a bit, which makes the lower interest rates a ‘return enhancer’- meaning your after-debt returns are increased.
There are some unique advantages to investing in commercial real estate- but there are also a few disadvantages. If you need to find out more about commercial real estate investment, contact Summit Commercial Capital– we’ll be happy to help.