Maarten De Jeu on Investing in Commercial Real Estate
Maarten De Jeu is a top strategic business advisor who has valuable insight into how commercial real estate investments can be beneficial to short- and long-term investment goals. Investing in real estate can be a lot easier than many individual investors think.
While residential real estate is often purchased to own or for rental purposes, commercial real estate is varied and can include many kinds of structures like office buildings or retail space. Even apartment buildings can be a commercial real estate investment as they are based on multi-family units.
Commercial properties are a different kind of investment from residential properties as commercial real estate is often a bigger expense and larger. When considering a commercial property, keep in mind that some investment laws have changed and there are more opportunities to benefit from ownership equity when purchasing commercial properties.
In 2012, the Jumpstart Our Business Startups Act was passed easing restrictions on small businesses allowing individual investors the ability and access to more capital to invest in a business.
It doesn’t take a fortune to start investing as new investors can start with as little as $5,000 in certain commercial real estate and earn a share in the property value or rent once the property is sold. In lending, investors can also collect on the monthly interest payments the borrower is making with their monthly secured loan payments.
These methods make it easy to reinvest the profits on the initial investment and take advantage of any applicable tax breaks.
Also, there are no market fluctuations or management fees with commercial real estate as with traditional investments, and there is less risk associated with a real estate investment.
Another great reason to take advantage of the commercial real estate market is that there is protection against inflation. Inflation associated with the price of goods and services for traditional investments can be costly, but real estate investments are not impacted this way. Commercial real estate generally appreciates at a higher rate than inflation making it low-risk and an excellent long-term investing strategy.
There are also rent increases with commercial properties over time further increase the value of your investments.
Commercial real estate can also serve as a form of short-term cash flow with rent from tenants. This income can be reinvested or used for other business purposes.
Commercial real estate investing is considered a hard asset because investors are much more likely to recover and maximize the value of this kind of investment. Upgrades and improvements can always be made further increasing the value of the property. Besides, consider the building insurance policy as another safeguard to a commercial real estate investment. Learn more: https://medium.com/@maartendejeu
If you own traditional stocks and bonds, it’s always smart to diversify with real estate. Whether selecting residential or commercial, there are advantages to both. Always weigh your investment risk strategy with a professional and seek out expert advice before purchasing any investment.
Maarten De Jeu is an expert investment strategist and founder of SVM Business Advisory, a business investment consulting firm.