Investing in the Commercial Real Estate Industry Instead of the Stock Market

The stock market is often the first thing that comes to peoples’ minds when they hear “investment.” However, it has become more and more worthwhile to take those same dollars and move them into real estate investing. With the proper guidance and considerations, the choice to invest in the real estate industry can bring returns that the stock market does not have.

At Sands Investment Group, we understand the benefits of investing in the commercial real estate industry. Our goal is to make others see it as well. These advantages can steer you towards new ways to grow your portfolio over time, from practical tax advantages to long-term security.

Real Estate vs. the Stock Market

Understanding how investing in commercial real estate differs from the stock market is more straightforward when comparing the two categories. Real estate is not as liquid as stocks, requiring more time, but the results often outweigh the disadvantage of time lost. 

When investing in the stock market, you buy a small piece of a company. This allows you to make money in two ways: value appreciation and dividends. On the other hand, real estate requires acquiring physical land or property. Here, the returns stem from collecting rent and property appreciation. The choice of what to invest in is personal and requires analyzing your financial situation, risk tolerance, and goals.

Practical Tax Advantages

The choice to invest in the commercial real estate industry comes with practical tax advantages. There are multiple instances of deducting expenses tied to owning an investment property. This includes mortgage interest, property taxes, management fees, insurance, ongoing maintenance costs, repair costs, and money spent finding potential renters.

From there, selling the property for more than you bought it results in taxing the income as capital gains, which usually entails lower tax rates.

Commercial real estate investors also have the chance to participate in 1031 exchanges that allow them to move from one property to another, providing tax benefits along the way. Learn more about this opportunity here.

Passive Income

There are few day-to-day requirements when investing in the real estate industry while still generating income. Consider this: in multi-family or residential properties, the revenue stems from rent. The tenant pays this, and the result is income for you. There is minimal action required to ensure that money comes in. On the other hand, the stock market requires more patience in seeing the result of the choices you are making at the moment.

Diversification of Your Portfolio

In recent years, we have seen why diversification of your portfolio can be advantageous. When economic turmoil occurs, having your investments in multiple locations can even out potential loss in other areas. If the stock market is struggling, your commercial real estate investments can still see success. It gives you another method of growth that does not require you to rely entirely on stock market investments.

Long-Term Security

If there is something that everyone is looking for in their financial decisions, it is long-term security. When investing in commercial real estate, you know that the time commitment is more significant than options such as the stock market. Over several years of owning the property, you can wait to see it appreciate. Along with that, you have the potential monthly rental revenue coming in.

With 10 to 25 year options, NNN leases are a great way for investors to find a reliable, long-term opportunity. Here, the business takes on the role of occupying the space for years. Due to this, landlords do not have to worry about finding new tenants to take on the space.

Feeling of Control

The physicality of commercial real estate investments gives buyers a feeling of control. You are the technical “CEO” of your investment in the role. This gives you the ability to cut costs, make improvements, choose tenants, change the rent, and decide on the best market opportunities. This lack of dependence on a larger entity, such as the stock market, can provide peace of mind knowing you can make changes when you want to.

Consider Commercial Real Estate Investing With Sands Investment Group

The stock market does not have to be your only option in investing. While it is considered a more hands-on investment, the commercial real estate industry gives you the returns you’re looking for. As we have continued to observe, it is valuable to find an option that provides peace of mind and a feeling of security in a tumultuous economy. Are you looking to place your finances somewhere other than the stock market? Sands Investment Group is the perfect place to start your commercial real estate investment journey. Contact our experts today by calling 844.4.SIG.NNN or sending us an email at info@SIGnnn.com.