Commercial real estate (CRE) investing has long been a popular approach for investors who want to build long-term wealth.CRE investors can choose from many ways to invest in real estate including retail stores, office buildings, industrial warehouses, restaurants, hotels, storage spaces, casinos, and healthcare facilities. CRE investors can also buy and flip houses, rent out properties, buy real estate-related stocks, or participate in real estate investment trusts (REITs).
What are the Reasons to Invest in Commercial Real Estate?
CRE investors choose to invest this way because of these reasons:
• High-income potential.
• Many tax benefits.
• Less competition compared to investing in residential real estate.
• Many solid investment opportunities.
• Less property turnover to deal with and fewer problematic tenants compared to residential real estate.
• More available help in maintaining and improving the invested property.
• A more diversified investment portfolio along with solid value appreciation.
• A proven way to generate long-term wealth.
Tax Benefits for CRE Investors
CRE investors can get a lot of tax benefits for their invested funds, especially compared to the stock market. The benefits include:
• Depreciation deductions for income taxes. Commercial real estate, like any other physical asset, wears down over time, so a portion of the property value can be deducted from income taxes each year.
• Interest expense tax deductions. Any interest that is paid on a commercial mortgage can be deducted from income taxes each year.
• Non-mortgage tax deductions can be claimed for things like the costs of property repairs, maintenance costs, some property management expenses, and some travel and education expenses.
• Any losses incurred on a real estate investment can also be used as a tax deduction.
• A Qualified Business Income (QBI) deduction is something that CRE investors may be able to take.
Seek Experienced Funding Assistance
Contact WCK Financial Lending LLC, based in Los Angeles, CA to help bring your investing dreams to reality. We offer great real estate financing solutions to meet your purchase, refinance or equity loan needs.