Do you currently have commercial real estate assets in your investment portfolio? While the stock market continues to show significant volatility, and less risky asset classes such as treasuries offer little to no return on investment, commercial real estate in the Boise MSA continues to provide an excellent risk/reward profile to investors.
Here are seven reasons why investing in commercial real estate is a good choice for growing your wealth:
1. Income and Spendable Cash – Commercial Real Estate Investments are secured by leases which provide a regular income stream, higher than typical stock dividend yields.
2. Appreciation of Asset Value – Commercial Real Estate Investments have historically shown appreciation in value that meet and exceed other investment types.
3. Accumulate Equity through Leverage – Placing debt on Commercial Real Estate can increase your return.
4. Multiply Current Cash-Flow through Leverage – When investors place “positive leverage” on an asset, they effectively multiply their net spendable cash by borrowing money at a lower cost than their property returns back to them.
5. Provides a Hedge Against Inflation – Generally, when inflation occurs, the price of real estate, particularly multi-tenant assets will also rise.
6. Unique Security Advantage – Commercial Real Estate is one of the few investment classes that is a hard asset that has meaningful intrinsic value. The property’s land has value, as does the structure itself. By choosing the location and asset quality wisely, investors can benefit from the security of knowing that they own an asset that has the potential to earn income regardless of what happens to the existing tenant(s). For this reason, commercial real estate investments do not fluctuate with the same volatility as the stock market.
7. Tax Benefits – The US Tax code benefits real estate owners in a number of ways. Mortgage interest and depreciation deductions can shield a large portion of your income stream. It is recommended that one consults his/her tax advisor to understand all of the benefits.
If you would like to discuss how you can invest locally – let’s talk