Commercial Real Estate: Big Tax Benefits for Business Owners

Commercial real estate, sometimes abbreviated as CRE, can be a great way for the savvy business owner to passively earn enough money to make a living solely on the financial gain from owning and managing real estate properties. Such entrepreneurs are officially recognized by the IRS as “real estate professionals.” To qualify for this designation, you must work a minimum of 750 hours in real estate per year, which must be more total time than you work in any other job for that year. Through a combination of cash flow and tax benefits, you could earn just as much as or more than you would working 40 hours a week, simply by letting your investments work for you instead.


Ideally, as a prospective real estate professional, you should have some level of experience in the world of investment and real estate that would help minimize your risk and maximize your reward. However, if you feel you are lacking in expertise in this area, then you would be wise to hire people reliable who do. A certified public accountant is especially vital for helping you manage your finances and investments, in addition to making the most of the potential tax benefits.


Those potential tax benefits of commercial real estate are numerous. Basic write-offs include normal expenses necessary for maintaining a property, such as funding for repairs, or you can save an even more sizeable chunk of money through property depreciation and property mortgage interest. Depending on how much property you own or have a stake in, these deductions can reach six-figure sums. While tax benefits can be a very lucrative aspect of CRE, there are other possible cash inflows that can help you boost your income as a real estate professional, such as selling property for a profit, collecting rent from an apartment building, or charging fees for services like parking.


If you are interested in retaining a livable income through commercial real estate, there is a wide range of choices at your disposal. Types of commercial properties you might like to invest in include restaurants, offices, land and hospitals, among many others. As a real estate professional, you are free to pursue an investment opportunity that matches your interests or background, as well as maintain a diverse set of real estate ventures from multiple property categories. You may have to work your way up to CRE being the majority of your income, and stay at your regular job as you acquire more investments, but with determination and smart decision making, you can make real estate a full-time gig – and be richer for it.


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