A great opportunity presents itself today for businesses to invest in commercial real estate. The economy is right for lending to businesses. Acquisition of commercial property especially owner occupied property is easier due to the changes in the underwriting guidelines. Lending to businesses that have a proven track record of at least two years of operations will help to stimulate our struggling economy.
Businesses can benefit a great deal from owning the property where they conduct their operations. There are numerous tax breaks and income strategies that will improve the bottom line. The definition of owner occupied commercial property is that the business that owns the property occupies at least 60% of that property. The classification of owner occupied allows for higher loan to value ratios. That means a business can borrow more money against the property than if it was classified a non owner occupied investment property.
A major benefit of owning commercial property is the rents collected can allow for the property to pay for itself and bring in a profit. Here is an example; an insurance agency that owns its property and occupies 60% of the space can pay itself rent and rent out the remaining 40% of the space to another business(es). This extra income stream can go on indefinitely. Suppose the owner of the agency wants to retire so he/she sells the business. The business is sold but not the property; this retired agent will still enjoy the income stream from the rents on the commercial property.
As stated earlier, now is a great time to find real bargains on commercial property especially in the Northern Colorado area. Location is not as important as it once was because the Internet (World Wide Web) has changed the way business is done and brought the world a little closer. There are still some areas of business that do depend on location; however the deals are still available. The investment of owning commercial property can be very lucrative and is worth the time to investigate the options available.