Inflation is usually defined as an increase in the price of commodities along with a fall in the buying value of money. The $40 which you made a decade ago and lived comfortably barely helps you in meeting your needs now. While you can’t control inflation, the federal government has also doubled their public debt since 2008 and now it stands high at $19.7 trillion and is still growing every day. The government can never save you or your family from all the financial woes. You have to take all the investment decisions so that you can get back positive cash flow which will help you control your physical assets. Did you ever invest in the current real estate market? If answered no, then you can try your luck as it is said that this is the best investment kind of late. Here are some reasons why.
- Offers you positive cash flow: One of the most talked-about benefits of the income producing or the commercial real estate investments is that leases usually protect the assets of the investor. Through this you can create a regular stream of income which is considerably higher than the typical yields of stocks and dividends.
- You can use leverage to multiply value of assets: One more benefit of commercial real estate investment is the ability to place the debt over the asset, which is several times the original equity. This way you can buy more with less money and also multiply the value of assets and increase equity as soon as the loans are gradually paid down.
- Offers a hedge on inflation: For every dollar that is made, there is also a liability against it. Historically, real estate investments have shown highest correspondence to inflation when contrasted to the other asset classes like the S&P 500 and the 10 year Treasury notes. As more and more countries print money in order to bolster economic growth, it is vital to recognize the advantages of owning commercial real estate investments which produce money and also offer you a hedge against inflation.
- Maximizes your tax advantages: You must be aware of the fact that Uncle Sam benefits the real estate owners in different ways including numerous mortgage interest rate deductions which can protect a portion of your positive cash flow. During the time of sale, IRS allows the investors a 1031 provision, thereby allowing the investors to invest in taxable gains for the near future.
- The pride of owning a property: When you have the right property at the right place and with the right tenants, this can produce a pride of ownership which is the highest kind of satisfaction among the asset classes. As homeownership is out of reach for most people, you can imagine owning multi-family housing instead!
Therefore, if you’re looking for ways of boosting your income, you can consider commercial real estate investment in order to reap the above mentioned benefits and also increase your ROI.