Under the right circumstances, investing in commercial real estate can be a very good investment for a company, and can be quite profitable.
However, if you’re new to the game, there are some serious questions you should ask yourself before becoming involved.
Can you earn some tax benefits from your commercial real estate investment?
If your business structure is a limited liability corporation, you may have just the right business composition to take advantage of depreciation on your personal balance sheet. Other types of business structures derive less benefit from owning commercial real estate, and should seriously consider whether it’s advantageous to the company before proceeding.
Do you have a privately owned company?
Publicly held companies usually will not want depreciation of assets like commercial real estate on their corporate books, which makes leasing a better option with regard to commercial real estate. This is true whether your company is huge or very small – what matters is whether it’s publicly owned or privately held.
How long have you been in business?
Lenders who provide funding to small businesses for commercial real estate loans always like to see at least two years of profitable business operations. This means you should have been in business for at least two years, and if you’ve been in business longer than that, the last two years should be profitable ones.
How big will your company be?
You should have a clear idea of how big you expect your company to be before you make a commercial real estate investment. It makes no sense to purchase a small to medium-size building, if you expect that your company business will grow into a very large operation. Invest in a larger building if you anticipate substantial business growth over the next several years.
Commercial real estate through Acquisition Capital Solution
If you have a commercial real estate investment in mind, but lack the capital to proceed, we may be able to help.
Contact us at Aqcuisition Capital Solution to discuss some options for making your next big real estate investment.