Commercial Real Estate Investing: Five Ways to Make Money

Fundamentally, there are about five different ways to make money investing in commercial real estate. Each one should be considered a tool in every investor?s commercial real estate investment toolbox:

Strategy #1?Equity Buildup: Most people are familiar with the concept of increasing the equity in a property. Equity build-up is one of the key ways to make money in commercial real estate. It can be done four ways:

One is to initially buy the property below market value. This gives you immediate equity buildup. To do this successfully, it?s important to have done your ?due diligence? on your property, understand your buyer?s needs, as well be a skilled at negotiating.

The next way to build up equity is through appreciation of the property. This can easily be done if you are keeping the property in good repair and making sure that when you purchase the property, it is in an area that is growing. It?s value is bound to appreciate over time.

The third way to buildup equity is by paying down debt. The key to this strategy is to always strive to get the lowest interest rate possible on your mortgage or other debt instrument.

The fourth way to create equity is when it?s time to sell, invest the effort to sell at above market value. Again, knowing your prospective buyer, having access to critical information, and being skilled at negotiating can give you an immediate boost in equity.

Strategy #2?Depreciation: At tax time every year, you can receive an after-tax profit boost because the calculated depreciation is taken is taken as operational expense directly against your profits. There is one caveat however: You can depreciate the cost of the buildings, but not the cost of the land.

Strategy #3?Collect Rents: Getting the property to carry itself is the goal. But don?t stop there. You want the rents to not only cover the mortgage and ongoing maintenance and any major repairs - you also want the extra cashflow to perhaps pay down the debt to increase equity or fund another investment.

Strategy #4?Offer Attractive Financing: When it is time to sell the property, you can often negotiate a better deal for yourself when you offer attractive financing or more convenient terms to the potential buyer. For instance, a prospective buyer may be willing to pay a higher overall price if they don?t have to pay as much cash upfront.

Strategy #5?Add Significant Value to the Property: This is one of the most valuable ways to make money. When you add significant value to a property, you can often get a big boost in profits. Adding value can be done several different ways:

First, look at making strategic improvements. Making repairs is obvious, but also look for strategic improvements to make in the property. By strategic, we mean to concentrate only on those items that will raise the value by multiples of what they cost you.

Then, analyze whether there?s an opportunity to convert a higher and better use. When there is a higher and better use for the property, it can be worth substantially more. For instance, if you own raw land in the path of progress, you could get it converted to commercial zoning.

There is an old saying ?Buy by the yard, sell by the inch.? Applied to commercial real estate, it means breaking up a property can often increase the value. For example, you can buy raw land, turn it into a subdivision, and sell off the lots to independent developers to build on.

In summary, use this quick ?checklist? as a way to jumpstart your commercial real estate money-making creativity. It will give you some additional ways to make money you may not have thought of before.

Here?s the key takeaway: When investing in commercial property, a savvy investor will always factor in as many possible ways to make money into the investment as possible. Because that?s the name of the game?to make as much money in as many ways as you can, with the least out-of-pocket investment.

The Benefits of Real Estate Investing

Real estate investing is increasing at a staggering rate these days. More and more individuals are learning that real estate investments can offer wonderful earning potential. Real estate investing is a process which has many attractive qualities that make it a viable money-producing opportunity. There are a number of benefits that go along with purchasing real estate investments and the following paragraphs will highlight some of these benefits. As you will see these attributes make it quite apparent why individuals are becoming interested in investment opportunities of this type.

Build Equity in the Property For those individuals who are looking to invest in real estate on a long-term scale, there are certain benefits to doing so. When individuals purchase real estate and hold onto it for awhile, they are ultimately able to build a good deal of equity in the home they are purchasing as an investment property. Equity is a beneficial aspect for the homeowners as the more equity a property has, the more that it adds to the net worth thereof. This is an important and frequently cited reason why individuals do choose to invest in real estate and maintain the property as an investment for a long period of time thereafter.

Possible Tax Advantages Another benefit of purchasing real estate for investment purposes is the possible tax advantages that one may receive as a result of owning the investment property. Depending on a variety of factors, individuals who own investment property may just see some gracious tax advantages as a result. Therefore, individuals may be more than ready to invest in real estate once they have looked into possible tax advantages that result from engaging in a transaction of this type.

High Rate of Return on the Sale of the Property When the investment property is sold somewhere down the road, the homeowners will most likely see a high rate of return on the sale of the property. Depending on the market at the time of the purchase and sale, this rate of return may be more than generous when one looks at the profit margin. Some factors to consider if looking to purchase property and sell it within a short period of time after the initial purchase include current market for property sales, renovations and upkeep necessary to get the property ready for the sale and ability to hold on to the property longer if a sale does not come as quickly as one had expected. If one has considered all of these possibilities and still feels that they will be able to sell the property quickly, then this is a wonderful benefit of real estate investment.

Lease the Property to Tenants While some real estate investors choose to purchase the property and then sell it shortly thereafter, there are other individuals who have a different reason for purchasing investment properties and wish to obtain a profit by other means. These individuals are ones who prefer to purchase the property and then lease it out to tenants. By doing so, the homeowners are able to pay for any mortgage which may be present on the property plus receive any additional income from leasing the property to tenants.

Investing in real estate is a wonderful way to gain equity in a piece of property, take advantage of possible tax benefits and maybe even make a considerable profit from the sale of the property once the individual feels like doing so. These are some of the many reasons why individuals are purchasing real estate as investment property and current low interest rates make now a perfect time to buy. The benefits of real estate investing are difficult to pass up, so go ahead and find your first real estate investment property!

About the Author

Ken Smith is a real estate agent that runs one of Chicagolands top real estate teams. He has also started <A href=”http://www.webnewsforus.com/blog/”>WebNewsForUs.com, a site that is dedicated to real estate agents learning to use their websites to grow a profitable business.

The Benefits of Real Estate Investing

Real estate investing is increasing at a staggering rate these days. More and more individuals are learning that real estate investments can offer wonderful earning potential. Real estate investing is a process which has many attractive qualities that make it a viable money-producing opportunity. There are a number of benefits that go along with purchasing real estate investments and the following paragraphs will highlight some of these benefits. As you will see these attributes make it quite apparent why individuals are becoming interested in investment opportunities of this type.

Build Equity in the Property For those individuals who are looking to invest in real estate on a long-term scale, there are certain benefits to doing so. When individuals purchase real estate and hold onto it for awhile, they are ultimately able to build a good deal of equity in the home they are purchasing as an investment property. Equity is a beneficial aspect for the homeowners as the more equity a property has, the more that it adds to the net worth thereof. This is an important and frequently cited reason why individuals do choose to invest in real estate and maintain the property as an investment for a long period of time thereafter.

Possible Tax Advantages Another benefit of purchasing real estate for investment purposes is the possible tax advantages that one may receive as a result of owning the investment property. Depending on a variety of factors, individuals who own investment property may just see some gracious tax advantages as a result. Therefore, individuals may be more than ready to invest in real estate once they have looked into possible tax advantages that result from engaging in a transaction of this type.

High Rate of Return on the Sale of the Property When the investment property is sold somewhere down the road, the homeowners will most likely see a high rate of return on the sale of the property. Depending on the market at the time of the purchase and sale, this rate of return may be more than generous when one looks at the profit margin. Some factors to consider if looking to purchase property and sell it within a short period of time after the initial purchase include current market for property sales, renovations and upkeep necessary to get the property ready for the sale and ability to hold on to the property longer if a sale does not come as quickly as one had expected. If one has considered all of these possibilities and still feels that they will be able to sell the property quickly, then this is a wonderful benefit of real estate investment.

Lease the Property to Tenants While some real estate investors choose to purchase the property and then sell it shortly thereafter, there are other individuals who have a different reason for purchasing investment properties and wish to obtain a profit by other means. These individuals are ones who prefer to purchase the property and then lease it out to tenants. By doing so, the homeowners are able to pay for any mortgage which may be present on the property plus receive any additional income from leasing the property to tenants.

Investing in real estate is a wonderful way to gain equity in a piece of property, take advantage of possible tax benefits and maybe even make a considerable profit from the sale of the property once the individual feels like doing so. These are some of the many reasons why individuals are purchasing real estate as investment property and current low interest rates make now a perfect time to buy. The benefits of real estate investing are difficult to pass up, so go ahead and find your first real estate investment property!

About the Author

Ken Smith is a real estate agent that runs one of Chicagolands top real estate teams. He has also started <A href=”http://www.webnewsforus.com/blog/”>WebNewsForUs.com, a site that is dedicated to real estate agents learning to use their websites to grow a profitable business.

The Benefits of Real Estate Investing

Real estate investing is increasing at a staggering rate these days. More and more individuals are learning that real estate investments can offer wonderful earning potential. Real estate investing is a process which has many attractive qualities that make it a viable money-producing opportunity. There are a number of benefits that go along with purchasing real estate investments and the following paragraphs will highlight some of these benefits. As you will see these attributes make it quite apparent why individuals are becoming interested in investment opportunities of this type.

Build Equity in the Property For those individuals who are looking to invest in real estate on a long-term scale, there are certain benefits to doing so. When individuals purchase real estate and hold onto it for awhile, they are ultimately able to build a good deal of equity in the home they are purchasing as an investment property. Equity is a beneficial aspect for the homeowners as the more equity a property has, the more that it adds to the net worth thereof. This is an important and frequently cited reason why individuals do choose to invest in real estate and maintain the property as an investment for a long period of time thereafter.

Possible Tax Advantages Another benefit of purchasing real estate for investment purposes is the possible tax advantages that one may receive as a result of owning the investment property. Depending on a variety of factors, individuals who own investment property may just see some gracious tax advantages as a result. Therefore, individuals may be more than ready to invest in real estate once they have looked into possible tax advantages that result from engaging in a transaction of this type.

High Rate of Return on the Sale of the Property When the investment property is sold somewhere down the road, the homeowners will most likely see a high rate of return on the sale of the property. Depending on the market at the time of the purchase and sale, this rate of return may be more than generous when one looks at the profit margin. Some factors to consider if looking to purchase property and sell it within a short period of time after the initial purchase include current market for property sales, renovations and upkeep necessary to get the property ready for the sale and ability to hold on to the property longer if a sale does not come as quickly as one had expected. If one has considered all of these possibilities and still feels that they will be able to sell the property quickly, then this is a wonderful benefit of real estate investment.

Lease the Property to Tenants While some real estate investors choose to purchase the property and then sell it shortly thereafter, there are other individuals who have a different reason for purchasing investment properties and wish to obtain a profit by other means. These individuals are ones who prefer to purchase the property and then lease it out to tenants. By doing so, the homeowners are able to pay for any mortgage which may be present on the property plus receive any additional income from leasing the property to tenants.

Investing in real estate is a wonderful way to gain equity in a piece of property, take advantage of possible tax benefits and maybe even make a considerable profit from the sale of the property once the individual feels like doing so. These are some of the many reasons why individuals are purchasing real estate as investment property and current low interest rates make now a perfect time to buy. The benefits of real estate investing are difficult to pass up, so go ahead and find your first real estate investment property!

About the Author

Ken Smith is a real estate agent that runs one of Chicagolands top real estate teams. He has also started <A href=”http://www.webnewsforus.com/blog/”>WebNewsForUs.com, a site that is dedicated to real estate agents learning to use their websites to grow a profitable business.

Commercial Real Estate Investing: Five Ways to Make Money

Fundamentally, there are about five different ways to make money investing in commercial real estate. Each one should be considered a tool in every investor?s commercial real estate investment toolbox:

Strategy #1?Equity Buildup: Most people are familiar with the concept of increasing the equity in a property. Equity build-up is one of the key ways to make money in commercial real estate. It can be done four ways:

One is to initially buy the property below market value. This gives you immediate equity buildup. To do this successfully, it?s important to have done your ?due diligence? on your property, understand your buyer?s needs, as well be a skilled at negotiating.

The next way to build up equity is through appreciation of the property. This can easily be done if you are keeping the property in good repair and making sure that when you purchase the property, it is in an area that is growing. It?s value is bound to appreciate over time.

The third way to buildup equity is by paying down debt. The key to this strategy is to always strive to get the lowest interest rate possible on your mortgage or other debt instrument.

The fourth way to create equity is when it?s time to sell, invest the effort to sell at above market value. Again, knowing your prospective buyer, having access to critical information, and being skilled at negotiating can give you an immediate boost in equity.

Strategy #2?Depreciation: At tax time every year, you can receive an after-tax profit boost because the calculated depreciation is taken is taken as operational expense directly against your profits. There is one caveat however: You can depreciate the cost of the buildings, but not the cost of the land.

Strategy #3?Collect Rents: Getting the property to carry itself is the goal. But don?t stop there. You want the rents to not only cover the mortgage and ongoing maintenance and any major repairs - you also want the extra cashflow to perhaps pay down the debt to increase equity or fund another investment.

Strategy #4?Offer Attractive Financing: When it is time to sell the property, you can often negotiate a better deal for yourself when you offer attractive financing or more convenient terms to the potential buyer. For instance, a prospective buyer may be willing to pay a higher overall price if they don?t have to pay as much cash upfront.

Strategy #5?Add Significant Value to the Property: This is one of the most valuable ways to make money. When you add significant value to a property, you can often get a big boost in profits. Adding value can be done several different ways:

First, look at making strategic improvements. Making repairs is obvious, but also look for strategic improvements to make in the property. By strategic, we mean to concentrate only on those items that will raise the value by multiples of what they cost you.

Then, analyze whether there?s an opportunity to convert a higher and better use. When there is a higher and better use for the property, it can be worth substantially more. For instance, if you own raw land in the path of progress, you could get it converted to commercial zoning.

There is an old saying ?Buy by the yard, sell by the inch.? Applied to commercial real estate, it means breaking up a property can often increase the value. For example, you can buy raw land, turn it into a subdivision, and sell off the lots to independent developers to build on.

In summary, use this quick ?checklist? as a way to jumpstart your commercial real estate money-making creativity. It will give you some additional ways to make money you may not have thought of before.

Here?s the key takeaway: When investing in commercial property, a savvy investor will always factor in as many possible ways to make money into the investment as possible. Because that?s the name of the game?to make as much money in as many ways as you can, with the least out-of-pocket investment.