4 ways real estate for commercial use is your smartest investment

Commercial real estate is also known as income-producing real estate. Even if this kind of investment normally is quite high it is also a lower-risk investment in the long run. For decades inflation has been on our minds and newspapers. It is defined as ‘a general increase in prices and fall in the purchasing value of money’. This means that money itself can not be controled and will continue to decrease itselves value over the years. That’s why you must invest with income streams with great results in the long term such as commercial real estate assets.

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At CT Private Property we would like to help you understand why income-producing real estate is your smartes investment by giving you four reasons to invest in commercial real estate to protect and grow your wealth.

  1. Positive cash flow
    One of the biggest benefits to income producing real estate investments is that leases generally secure the assets. This provides a regular income stream that is significantly higher than the typical stock dividend yields.ct-retail-investment-mallorca
  2. Low-cost debt leveraged to multiply cash flow
    Placing “positive leverage” on an asset allows for investors to effectively increase positive cash flow from operations by borrowing money at a lower cost than the property pays out. For example, if a property generating a 6 prcent cash-on-cash return were to have debt placed on it at 4 percent, the investors would be paid 6 percent on the equity portion and approximately 2 percent on the money borrowed, thereby leveraging debt.
  3. Capitalize on the physical assets
    Income-producing real estate is one of the few investment classes that, as a hard asset, has meaningful value. The property’s land has value, as does the structure itself, and the income it produces has value to future investors. Income producing real estate investments do not have red and green days, as does the stock market.
  4. Asset value appreciation
    Over time, more and more inflation has made it into the economy, drastically reducing purchasing power. However, income producing real estate investments have historically provided excellent appreciation in value that meet and exceed other investment types. Properties historically increase in value as the net operating income of the property improves through rent increases and more effective management of the asset.

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If you are looking to invest in a property in Spain, don’t hesitate to contact us at CT Private Property Consulting or go check our website to find out everything we can do for you.

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