If you’re looking to invest in something, consider investing in commercial property. If you are looking to diversify your portfolio, generate income, and find tax advantages, commercial property investing is worth exploring.
At HOWE Louisville, we work with real estate investors and small business owners who are interested in commercial property. We know this can be a daunting process for investors, so our goal is to provide unrivaled support. Our deep commercial real estate experience and market knowledge gives you a critical competitive advantage in the greater Louisville market. We do the hard work.
For this article, we wanted to share a few reasons why you should invest in commercial real estate:
- Commercial real estate investing adds diversification. Commercial real estate has a low correlation with the stock market, which means a drop in global equity doesn’t necessarily impact your investment. A diversified portfolio can potentially mitigate risk with investments in various commercial real estate projects.
- Improved cash flow. Commercial real estate investments offer income in the present, as well as the potential for a return based on the asset’s future appreciation. A big portion of the total investment return comes from cash flows within rental income.
- Less volatility. Long-term rental arrangements are common to commercial real estate, which lead to a steady operating income. Tenants often sign lease agreements for about three to five years or more, instead of just a year. Commercial real estate has shown less volatility than stocks and they are less impacted by short-term events.
- Investment in a hard asset. All real estate is a hard asset that is a real, physical thing with intrinsic value in the building and the land. This hard asset offers income in the present and potentially a return based on the asset’s future appreciation. In the last decade, the U.S. Commercial Price Property index, which tracks commercial property real estate values at purchase, has more than doubled.
- Provides an inflation hedge. As services and goods increase in the economy, real estate benefits. Increasing wages and profits also usually increase what property owners can charge.
- Potential tax benefits. If structured correctly you may be able to claim deductions related to depreciation, interest expense, and other items help to defer the taxes on cash distributions.
Interested in investing in a commercial space? Click the link for more reasons to invest in commercial real estate.
Looking to Invest in Louisville Commercial Properties?
Whether you’re new to investing or a long-time investor, you can benefit from investing in a commercial space, especially with our team at HOWE Louisville looking out for your best interests. Creating commercial real estate solutions requires quality services, a professional team, and the ability to be creative and holding each other to the highest standards, which at HOWE Real Estate, we value that process and ensure your needs are a priority.
Let our team of professionals at HOWE Louisville help you get started on looking for commercial property. We work with buyers, sellers, lessors and lessees across all property types in and around Louisville. To contact us, send us an email or call 502-890-4475.