As an alternative to stocks and bonds, many investors seek out opportunities in commercial real estate. Even in times of economic instability, commercial real estate might potentially provide the appreciation and consistent returns that most investors seek. Here are four reasons why you should consider adding commercial real estate to your portfolio,
Current Income and Cash Flow
Commercial real estate investments have the ability to provide consistent income that is higher than standard dividend equities and bonds. Commercial real estate has historically not moved in lockstep with stocks and bonds, so stable income can potentially provide protection and diversification against financial market volatility.
A real estate investor may be able to benefit from a variety of tax incentives by investing in commercial real estate. Depreciation, interest expenditure, and other deductions may be used to minimize or defer paying taxes on cash distributions.
Hedge Against Inflation
Direct investing in commercial real estate can be a great hedge against inflation for investors concerned about how it will influence their portfolios. Commercial real estate returns have historically outperformed inflation over five-year ownership periods.
The flexibility to place debt on the property, which can raise the purchase power of each dollar of equity, is a major advantage of direct commercial real estate investing. This improves the property’s overall potential returns, but it also increases the risk.
Monroe Funding Corp has a wealth of experience and knowledge to help you reach your investing goals. To learn more about Florida Commercial Real Estate Loans, contact us online or by phone at +1 (954) 419-3539.