Investing in commercial real estate has a 9.5% ROI, so it’s a good move for anyone looking to diversify their portfolio. Whether you need a space to conduct business or want to lease it out to commercial tenants, you’re making a great choice.
Here, we’re going to talk about some top benefits of real estate investing in Orange County. Read on to learn how you can make the most of your next financial move.
Diverse Opportunities
“Commercial real estate” isn’t just a single type of property. It includes:
- Retail store venues where businesses can set up shop
- Office spaces for SMBs to conduct business
- Industrial facilities for manufacturing plants
- Warehousing venues for distribution
You’re not locked into a single type of property when you consider a commercial real estate investment. You can lease out multiple types of spaces and broaden your reach over time.
Portfolio Diversification
Investors need to diversify their assets to mitigate the risk of financial loss. If you put all your eggs in one basket and only invest in stocks, for example, you’re going to lose all your money when the stock market dips. However, if you have more assets like bonds and real estate, you’ll have income from multiple sources and won’t lose all your money because of a single financial event.
Real estate is a safe investment because it’s tangible. You can access the property, involve yourself in maintenance, and even use it for business if the need arises. People are also constantly looking for places to rent out for business, industrial, and distribution purposes.
This means that your commercial property will still generate income for you regardless of your other investments. You’ll still be getting passive income even if you make poor stock market investments or try your hand at buying new virtual assets.
Passive Income Potential
“Passive income” is money that comes from a source besides an employer. Renting out a space and collecting money from tenants is one of the most common passive income sources.
You don’t need to do anything but prepare the paperwork, sign a lease, and maintain the property when necessary. In exchange for this low-effort job, you can collect thousands of dollars each month in rent.
Commercial properties are a great way to get a lot of passive income since you can lease out to multiple tenants. You can give multiple companies office space on different floors of your building to collect from each business individually. You can rent out warehouse space or storage facilities to many different commercial companies.
Plenty of Financing Options
Commercial Orange County investing has more passive earning potential than residential alternatives. You’ll be glad to know that there are also more financing options available for those looking for commercial investments.
Banks and credit unions have loan programs made specifically for commercial investments. Third-party lenders are also often willing to give out commercial loans because they’ll be paid back with interest.
In a lot of cases, these loans have lower interest rates than residential property loans or personal loans. They also usually have better payback terms than those that residential mortgage brokers might offer. You’ll have a wider variety of funding to choose from.
Tax Deductions
Those who invest in commercial properties also can get a lot of tax benefits. Some benefits include:
- Depreciation deductions for income taxes
- Deductions for property repairs, management and operating expenses, and maintenance fees
- Tax deductions for interest expenses
- Reduced tax burdens for your beneficiaries/heirs
- Deductions for Qualified Business Income (QBI)
These tax breaks make real estate a profitable investment. You don’t need to worry about high taxation on your commercial property. You will also be able to funnel more money back into the property and increase its overall value for future rentals and leasing opportunities.
Value Appreciation
Commercial properties will also naturally accrue more value over time. This is true even when you don’t consider the changes, renovations, and improvements you’ll make.
The real estate market is a steadily growing one, especially in some areas of California. The population has increased a lot over the past decade. There are more jobs than ever before.
This means that Orange County investors stand to get a lot of money as a result of this natural growth. The demand for commercial rentals will go up while the supply remains stagnant. You’ll be able to collect more rent and sell it for more money in the future when you choose to move on.
A Long-Term Investment
Residential properties are often fairly short-term investments. You only have a few tenants and they won’t require too much maintenance. This is, of course, assuming that you keep the property in top shape to begin with, but it will be less effort than a commercial building.
Commercial investments require more care and maintenance, but this is actually a good thing. You will have the chance to make improvements and turn your profitable property into something extremely lucrative.
Over time, you’ll be able to perform major renovations that greatly increase the property’s value. You can charge more rent and get greater benefits. Commercial real estate is an investment that never stops giving.
Start Investing in Commercial Real Estate Today
Now that you know the top benefits of investing in commercial real estate, it’s time to get started. Our experts are dedicated to helping people in Orange County find commercial properties to buy or lease.
We will help you access retail, industrial, office, and warehouse facilities so that your business can be as profitable as possible. Call (877) 775-9625 to begin searching for property to invest in.
