There are many ways to invest in real estate including buying property, renovating homes for rent or resale, new residential construction, buying real estate-related stocks, investing in real estate investment trusts (REITs,) and investing in commercial real estate. Some of the highest returns can be achieved by investors in commercial real estate who also can get attractive tax benefits.
Why People Invest in Commercial Real Estate
Commercial real estate is a proven investment category. It includes a variety of property types including office buildings, retail stores, restaurants, movie theaters, warehouses, storage spaces, and healthcare facilities.
Benefits for Investors in Commercial Real Estate Include:
-High-income potential. Commercial buildings generally come with higher prices and rents than other types of properties.
-Wide variety of properties are available. Commercial real estate is less competitive compared to residential real estate.
-Less tenant turnover in commercial real estate compared to residential real estate, with fewer problematic tenants.
-More skilled help is available for improving and maintaining a commercial property, and tenants are generally more motivated to maintain their occupied spaces.
-Many tax benefits are available.
Commercial Real Estate Tax Benefits
Consider these tax benefits for investing in commercial real estate:
-Commercial mortgage interest payments are tax-deductible.
-Many non-mortgage expenses can also be claimed against taxes including repairs, maintenance, renovations, upgrades, and management expenses.
– Significant depreciation can be claimed against taxes over time due to the fact that commercial structures experience wear and tear like other structures
-CRE offers more tax benefits for individuals who are planning to retire compared to withdrawals from an IRA, for example. These gains are taxed at a lower capital gains rate compared to a higher personal income rate with an IRA.
-There is a qualified business income tax deduction, federal tax credits, and other government tax incentives, including those for opportunity zones.
Seek Expert Funding Assistance
Contact Triport Lending, to get the funding you need from a trusted commercial finance company. We offer a wide range of financial solutions.