Real Estate for commercial purposes is also to be understood as Real Estate that generates income.
Although this type of investment is usually considered relatively high, it is associated with less risk in the long run. For decades, inflation has been in our minds and in the media. It is defined as 'a general increase in the price level of goods and services and a decrease in the purchasing power of money'. As a result, the money cannot be controlled and loses more and more purchasing power over the years. Therefore, investing in income streams with long-term profits such as real estate for commercial purposes is recommended.
At In2assets, we want you to understand why income-generating real estate is the smarter investment. We give you four reasons to invest in Commercial and Industrial Property purposes to protect and increase your balance sheet.
- Positive Cashflow
One of the biggest advantages of investing in income-generating property is that renting secures ownership. Thus, a regular income is ensured, which is mostly significantly higher than dividends from investment capital.
- Low leveraged debt to increase cash flow
Access to cheap debt financing when acquiring real estate allows investors to increase positive cash flow because the property generates more cash flow than is paid for the borrowed financing. For example, a property that generates 12 percent on an 8 percent debt rate would generate 4 percent for two investors in equal shares, while 2 percent would fall on borrowed capital.
- Real Estate as an investment
Income-generating properties are among the few types of investments that have actual value as physical properties. The land has its value, just as the building structure has its value. The profit generated by the property has value for future investors. Unlike the stock market, profit-generating real estate does not have green or red days.
- Appreciation of property value
Over time, inflation has made way in the economy, reducing purchasing power. In contrast to other areas of investment, investments in profitable real estate have seen excellent value gains. The value of real estate ownership increases, and meanwhile the net profit from the use of the property grows, for example through the increase in rental income and efficient property management.
For a selection of commercial and industrial property investments visit www.in2assets.com
