The Rewards and Risks of Commercial Real Estate Investment

Investment in commercial real estate offers great rewards. It also offers great risks. The key to seizing the opportunities and minimizing the risks is knowledge and preparation.

All that’s required beyond that is common sense and an objective eye about the risks and rewards. And that’s the purpose of this articleto give you a quick guide to those rewards and risks so you can decide if the field is the right choice for you. Let’s look at the rewards first.

1)The first reward of commercial real estate investment is that it’s relatively easy to get into. In other words,The Rewards and Risks of Commercial Real Estate Investment Articles you don’t need a PhD to be successful. https://rozwojfinansowy.com/ In fact, you don’t need a degree at all. What you do need is a willingness to learn by yourself and from professionals in the field.

2)The second reward of investment in commercial real estate is it offers a great variety of investment opportunities. Properties can range from duplexes to multi-unit dwellings to shopping centers. This provides you with a wide range of investment possibilitiesand profits!

3)The third opportunity lies in the ability to take advantage of leverage. Leverage is the use of other people’s money (OPM) to finance your commercial real estate investments. Through the use of leverage, you can get into the market by investing little of your own capital.

4)The fourth reward of commercial real estate investment is the opportunity to achieve good returns. Historically, U.S. investors have received an average 8-10% annual return on such investments. Plus, unlike the stock market, commercial real estate is not volatile and doesn’t suffer the sometimes extreme ups and downs of securities investments.

5)The fifth rewardand one of the best!is that commercial real estate investments provide long-term appreciation. In other words, such investments tend to increase in value over time, putting money in your bank account on a consistent and long-term basis.

6)The sixth reward is that commercial real estate investments generate income and can do it over long periods of time (e.g., apartment buildings, office buildings, etc.).

7)The seventh reward of such investments is that they provide three real tax benefits–deductibility, depreciation, and deferability. You can deduct normal expenses, depreciate your investments, and defer taxes through the Tax-Deferred 1031 Exchange.

8)The eighth reward of commercial real estate investments is that it permits you to build wealth. With solid purchases, you grow equity over time, and, all the while, you receive income. Talk about a great retirement plan!