Why You Should Invest in Commercial Real Estate
Breaking Into Commercial Real Estate In South Florida
Commercial real estate can be an intimidating world for many, but the benefits are well worth the risk and the learning curve. With a solid team behind you, you can break into the commercial real estate world and start building your portfolio. But why invest in CRE in the first place? Here are a few of our top reasons why we think you might want to invest in commercial real estate.
Diversification
Even if you already have a good portfolio, adding some commercial real estate into the mix can be beneficial. You’ll find much different behavior than what you’re used to with stocks and bonds, since commercial real estate doesn’t typically correlate with the stock market. Essentially, your investment won’t be at the mercy of the market. There are tons of different projects you can invest in, from office space to apartment buildings and everything in between.
Decreased Volatility
If you’re purchasing an apartment complex, for example, you’re likely to experience little volatility within your cash flow. Tenants in CRE long-term rentals typically sign 3- to 5-year lease agreements, giving you a solid window for reliable cash flow. In general, you can expect less volatility than you would with publicly traded REITs and stocks.
Hedge Against Inflation
While many markets suffer with inflation, real estate tends to stay steady. As profits and wages increase, tenants can afford to pay more, which means you can charge more for your space, whether you own apartments or offices. You can watch the effects of inflation on goods and services, while your own investments stay reliable.
Tax Benefits
If you negotiate your contract properly, you might be able to take advantage of tax deductions related to interest expenses, depreciation, and more. As of 2018, tax laws allow for CRE owners to claim a 20% deduction of income received through pass-through entities, like LLCs. Additionally, you might be able to deduct some of your property’s depreciated value to cover the cost of your upkeep and maintenance.
Work With An Experienced Commercial Real Estate Attorney In South Florida
If you’ve decided to take the leap to invest in commercial real estate, you’ll definitely want a lawyer on our side to help you negotiate contracts and secure your spot at a fair price. Leah Mayersohn is an experienced Florida commercial real estate lawyer who has seen countless cases, so he’s ready for anything you need. Contact Schecter Law today to learn more!
