With interest rates now at historically low levels and the United States economy growing at a strong pace, many business owners have been considering the purchase of commercial real estate for their business locations. The benefits and drawbacks to commercial real estate ownership vary from business owner to business owner but potential buyers should educate themselves about the obvious and sometimes hidden benefits to the ownership of a commercial property. Below are some of the major benefits to ownership as opposed to leasing a commercial space.

For many business owners one of the primary benefits of commercial real estate ownership are the tax deductions that can be taken on the interest portion of the monthly commercial loan payment. These deductions can be substantial and each business owner should consult a qualified tax specialist about their unique situation. On average, commercial real estate properties will appreciate about two to three percent above inflation over the long term. This equity appreciation can result in significant financial gains over a period of decades.

Many small business owners will not receive a pension when they decide to retire. The equity appreciation on commercial property can be significant. An owner can decide either to sell their property at retirement, cashing in on equity appreciation or lease it to another business for a continuous retirement income stream. In fact, in many situations, a business owner may be able to lease out an unused portion of his property, such as a spare office, before retirement for additional income.

Great fixed rate loans for terms up to 30 years are now available for owner occupied commercial properties. In fact, in some instances, with strong financials, a business owner may qualify for loan financing up to 100% of the purchase price for his commercial real estate. Business owners should consult an experienced commercial mortgage adviser before making an offer on a commercial property. In addition to the easily tangible benefits outlined above the business owner who purchases a property to house his business location will be able to have the satisfaction that only comes with ownership and he won’t be making his landlord rich.

Tags: Business, Commercial Real Estate, Property

This entry was posted on April 2, 2010 at 2:16 am and is filed under Commercial Real Estate. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.