In the commercial real estate market we are seeing more opportunities to own an investment property that can offer solid returns to an individual investor/user. In many cases, the available property is being marketed by an owner who has decided to stop upgrading his facility and it may need some amount of renovation and/or updating. This is an ideal time to bring the “curb appeal” up to your standards and at the same time, modify the space to your company’s needs. With the current attractive borrowing rates available to qualified borrowers, the financing package requirements can be substantially less than the generated cash flow from the building. With the addition of an additional tenant, the owner can either pay a market rate rent or he/she can choose to reduce it’s occupancy cost to a level that just covers its payments etc.
In a recent illustration of a purchase of a 7,000 sf building, a professional owner/user can rent out the balance of the building it does not require and generate a $29,000 excess cash flow per year after payments. The benefits of the depreciation will be an additional saving for the owner.