Have you ever wanted to own a piece of commercial real estate in Kentucky? Are you getting closer to pulling the trigger on such a purchase? Commercial real estate has plenty of advantages. Let’s take a look at the benefits of owning a piece of commercial real estate in today’s post.
One of the biggest benefits of owning commercial property is the possibility of cash flow. Does the property allow for business or residential tenants? If so, renting out the space in your building will create cash flow. The income from having tenants can help you pay down the purchase price of the property or the mortgage/loan you used to acquire it.
There are multiple tax advantages to owning commercial real estate, and they include the following:
- 1031 exchange: Profits from the sale or trade of an investment property can be used to acquire another similar property within 180 days
- Cost segregation: Using a 39-year period, you can depreciate the value of the building you own and some of its components (electric)
- Section 179: This provides you with deductions for furnishings and other equipment up to $500,000. The items must be put into service in the building within the year that they are bought
It’s always smart to talk to an accountant or another financial advisor prior to purchasing commercial real estate.
Owning a piece of commercial property can bring with it a lot of success and benefits. Aside from tax breaks and other advantages, commercial real estate owners have a sense of pride in their property. They can also turn their property into a profit in the future when in a redevelopment zone.