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IWP!, flagship product is Chicago's premiere real estate Investment
magazine. Entitled Invest With Passion!, it is the tool for investors and professionals in the
Mid-West. The publication seeks to grow it's market share by providing
powerful information designed to build the reader both as an investor and a
person.
Since it's release in January of 2006, the magazine has been well received and
continues to gain momentum and support. The education, information, and
networking opportunities for the real estate investor has been long neglected.
No More!
The time is now and the momentum is building.
It's Happening!
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10 Reasons To Invest In
Strip Malls
1. DIFFERENT TYPES OF TENANTS
Commercial property tenants are different from those in residential
units. They are usually business owners that are leasing space for
their businesses. Therefore, they are more inclined to take care of
their units for the sake of their customers. In addition, they tend to
be more financially stable and are less inclined to miss rental payments
or break their lease.
2. LESS HANDS-ON
Managing multi-unit commercial properties requires less hands-on
attention than managing multi-unit or multiple residential properties.
You don’t have to worry about
midnight phone calls
about stopped up toilets. In addition, if you hire professional
property management, they charge less of a percentage to manage
commercial property.
3. LONG-TERM & TRIPLE
NET LEASES
Commercial leases are usually long-term, 5-10 years. In fact, larger
companies like Wal-mart and Walgreens sign 20+ year leases. In
addition, triple net leases are also optional where the tenant pays
rent, property taxes, insurance, and maintenance expenses.
4. TAX DEDUCTIONS
Investors in commercial real estate can offset the income from the
investment through tax deductions from the depreciation of
improvements - parking lots, buildings, equipment, etc.
IRS rules allow nonresidential properties to be depreciated over 39 years.
Additional deductions can also be taken for the interest paid toward the
mortgage.
5.
TAX DEFERMENT OPTIONS
Like
residential properties, paying taxes on capital gains from the sale of
commercial real estate can be deferred by purchasing another
“like
kind” property. The investor can continue to sell properties for a profit
and defer taxes indefinitely.
6.
LESS VOLATILE MARKET
Currently the residential real estate market is extremely volatile, due to
the abundance of properties that have saturated the market and the changes
in the mortgage industry. On the other hand, the commercial real estate
market has barely been impacted by those changes.
7.
OPTIONS FOR SMALLER INVESTORS
New
forms of ownerships like Tenants In Common (TIC), Passive Investment
Syndications, and Real Estate Investment Trusts (REIT) have opened the doors
for smaller investors to invest in commercial real estate. TICs allow
investors to own fractional shares of larger real estate projects. Passive
Investment Syndications allow smaller investors to passively invest in
larger real estate projects. And last, but not least, REITs combine the
concepts of real estate investing and the stock market. Investors purchase
shares of stock that invest in large real estate projects.
8.
HIGH DEMAND = HIGHER VALUE
Because of the increased opportunities for smaller investors to participate
in commercial real estate, the market is becoming more competitive. As a
result, an increase in demand is followed by an increase in value. Hence
the basic economic components of supply and demand.
9.
FINANCING LEVERAGE
Financial leveraging for commercial property allows investors greater
returns on their investment. In a $500,000 investment, with a $100,000
(20%) down payment, the investor could receive a return on both the $100,000
down payment and the $400,000 financed amount. Therefore, if the investor
obtains a 9% interest rate on a $400,000 loan and the property yields a 12%
return, the investor would receive a $24,000 annual return. (12% of the
$100,000 initial investment and 3% [the difference between the 12% return
and 9% interest on mortgage] of $400,000 financed amount.)
10.
LUCRATIVE PROFITS
Commercial real estate, on average, generates 50%-100%+ more income than
residential properties. Investors generate income from rents, appreciation,
and profit on the sale. Currently, commercial units are being rented for
$8-$30 per square feet in the Chicagoland area - you do the math! |
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