3 Benefits of Investing in Commercial Property

By: Alejandra Torres

Everyone has a hot take when it comes to investing. Maybe you’re currently leasing a commercial space or perhaps you’re a first-time buyer who is flirting with the idea of purchasing a property for a new business venture—whatever the case, you’re right to be contemplating this big move.

Investing in commercial property can be beneficial for several reasons. Not only does it give you the opportunity to build equity, it also opens the door for significant cash-flow. Plus, who wouldn’t enjoy being able to say they own a commercial property? Borrowers often take pleasure in knowing they have a tangible space in their name.

Below we delve into three main benefits borrowers should consider before investing in commercial property.

 

    1. Cash-Flow

Borrowers who invest in a commercial space can tap into a new source of income. Whether you’ve purchased a multifamily property or a local strip mall, housing multiple tenants brings in additional revenue to your pockets.

Picture this: an investor purchases a multifamily property that has several tenants, who each pay a monthly rent. As the landlord, the borrower can use that tenant income to either a) pay off the mortgage or b) make improvements on the property.

But that’s not all—this additional revenue is yours and yours only, so you can utilize it however you see fit.

 

    2. Tax Deductions

Borrowers are often happy to learn that purchasing a commercial property creates opportunities for significant tax benefits.

Besides the interest expenses, as well as state property taxes, borrowers are able to depreciate their assets and write off the mortgage interest paid throughout the year. Not to mention the several tax deductions that are geared towards small business owners.

You can consult a tax expert to get more information on which benefits you are eligible for before purchasing the commercial property.

 

    3. Equity

You probably hear it all the time—equity is something people strive to build. If you’re on the hunt for this dream, then good news—with a commercial property in your arsenal of investments, you are likely to build a significant amount of equity.

Small business owners have the ability to leverage their property by placing debt on the asset (think refinancing the property and taking out a larger loan). As the loan payments are completed, the equity rises.

It’s generally expected that properties will build equity over time, whether it’s from a booming business or the location of the space adding value to the property. Owning commercial real estate offers the borrower more options.

 

Ready for your own commercial loan?

If you’re set on getting a commercial loan, let our team of expert loan officers guide you. Connect with Commercial Direct, a division of Silver Hill Funding, LLC, to get started. We can help you navigate which option is right for your loan request and give you more information on investing.

Silver Hill Funding, LLC and its successors and/or assigns as their interest may appear, is the proposed lender. Commercial Direct is a division of Silver Hill Funding, LLC.

Author: Alejandra Torres

As the Content Specialist at Commercial Direct, Alejandra Torres writes and educates readers on all things business. When she’s not breaking down the steps to obtaining a commercial mortgage, you can catch her reading up on the latest market trends or watching the next big business venture on Shark Tank.

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