When people think about investments, they usually think of stocks and bonds. However, do you want to make an investment that can have long-term dividends? If so, you may want to consider investing in commercial real estate instead.
1. Cash Flow.
One great reason to buy commercial real estate as an investment? The possibility for guaranteed cash flow. Unlike stocks, where you have to sell your shares to make money or wait for a board of directors to decide on annual dividends, you can be assured of getting a cash dividend on a regular basis with commercial real estate. This is whether it is set up monthly, quarterly, or annually.
Real estate returns are a viable prospect right now, even compared to other forms of investments such as stocks or bonds. The National Council of Real Estate Investment Fiduciaries Property Index reported an average annual return of 8.8% from 2000 to 2015. This is much better than the average performance of other stock options.
These are flip sides of the same coin. Because land values do fluctuate, by watching prices carefully, a smart investor can time selling commercial real estate in order to make an optimum gain in his investment. On the other hand, certain improvements to structures depreciate over time. According to Crowd Street, “Depreciation is utilized by real estate operators as a tax benefit tool, which allows an investor to utilize a passive “loss” from depreciating improvements to offset other passive income."
How Does Commercial Real Estate Investment Work?
You may have a few questions about how investment in commercial real estate works. Different types of rental properties can be available for you to purchase. Additionally, it’s wise to consider which of these is right for you. You may be looking at purchasing space for offices to rent. This type of property rental usually leases out for three to five years at a time. Another long-term rental prospect to consider might be industrial space. This, too, would probably be a long-term leasing situation. If you are looking for an investment which offers a shorter-term leasing system, you may want to look at purchasing an apartment building. Leases for renters usually run for a year, but there will definitely be more bookkeeping involved.
Another way that you can make money off of purchasing commercial real estate is the increase in the value of your property over time. Depending on your intended outcome, it's important to look at how ripe a community is for growth and to purchase property where the growth potential is high. If you’re looking for a city with hot prospects, Nashville, Tennessee is a good place to start. Nashville has consistently been placed in the top ten ‘hot’ cities in the United States for real estate investment opportunities. Plus, Zillow Group recently placed it as number one in its predictions for the 2017 hottest real estate markets.
Call Tyler Cauble To Begin Investing In Commercial Real Estate
Are you looking to invest in commercial real estate in the Nashville area? If so, you’ll want to trust your purchase to someone who knows the business and the area. Give Tyler at Vastland Realty a call today to advise and assist you with your investment needs!
Check out our commercial real estate leasing tips!