RENTAL INCOME: Owning commercial real estate like a retail center or a distribution industrial building gives the investors a rental income from the tenant that occupies that property—the gain on the value of the underlying property when it is sold usually occurs years later. The rental income services the debt on the property and any expenses associated with that property, and the free cash flow is distributed to our partners on a quarterly basis.
PROPERTY APPRECIATION: Our primary focus is to invest in significant real estate where the underlying value of the land will continue to appreciate over time. Investing in front of the path of growth helps property appreciate more quickly with the theory that more people tomorrow create more demand for goods and services in a submarket, and thus more tenants will want to be there. Whether it is a strategically located hotel or marina, or industrial property in a distribution market, location is key. —- Location! Location! Location!
REAL ESTATE DEPRECIATION: One of the other great benefits of investing in commercial real estate is depreciation. Real estate depreciation is an income tax deduction that allows a taxpayer to recover the cost or other basis of particular property placed into service by the investor. Depreciation is essentially a non-cash deduction that reduces the investor’s taxable income. Many investors refer to it as a “phantom” expense because they are not actually writing a check. It is merely the IRS allowing them to take a tax deduction based on the perceived decrease in the value of the real estate.
INFLATION PROTECTION: Commercial real estate also can provide a good hedge against inflation. As countries like the U.S. print money to stimulate economic growth, inflation occurs, and the price of real estate with high replacement costs will also increase. For example, if the costs of wood, steel, and labor go up, then the cost to build or replace a building will go up. And thus, the value of the existing buildings will go up as many investors and developers will invest capital in existing real estate rather than new construction. This trend will allow the investors who already own real estate to protect themselves from this price increase and inflation by having their assets increase in value.
PROPERTY APPRECIATION: Our primary focus is to invest in significant real estate where the underlying value of the land will continue to appreciate over time. Investing in front of the path of growth helps property appreciate more quickly with the theory that more people tomorrow create more demand for goods and services in a submarket, and thus more tenants will want to be there. Whether it is a strategically located hotel or marina, or industrial property in a distribution market, location is key. —- Location! Location! Location!
REAL ESTATE DEPRECIATION: One of the other great benefits of investing in commercial real estate is depreciation. Real estate depreciation is an income tax deduction that allows a taxpayer to recover the cost or other basis of particular property placed into service by the investor. Depreciation is essentially a non-cash deduction that reduces the investor’s taxable income. Many investors refer to it as a “phantom” expense because they are not actually writing a check. It is merely the IRS allowing them to take a tax deduction based on the perceived decrease in the value of the real estate.
INFLATION PROTECTION: Commercial real estate also can provide a good hedge against inflation. As countries like the U.S. print money to stimulate economic growth, inflation occurs, and the price of real estate with high replacement costs will also increase. For example, if the costs of wood, steel, and labor go up, then the cost to build or replace a building will go up. And thus, the value of the existing buildings will go up as many investors and developers will invest capital in existing real estate rather than new construction. This trend will allow the investors who already own real estate to protect themselves from this price increase and inflation by having their assets increase in value.
from: sagestreet.com
Fully Leased NNN in McKinney