Whether or not you are new to the Alaska commercial real estate market, one of the most crucial questions to ask yourself is “Which investment makes the most financial sense for me?” or rather, “Which investment will ultimately help me to save or make money?” Real estate can be one of the most lucrative investments if you plan wisely—in fact, it’s been heralded as the best above even stocks and gold—and when it comes to the commercial market, there are dozens of ways your investment will actually help you to save.
Below are just five of those ways that investing in Alaska commercial real estate can help you save money— thus making it one of the best financial investments:
While commercial real estate differs greatly from its residential counterpart, the concept of building equity as a means of growing your wealth is the same. By investing in Alaska commercial real estate, you give yourself the opportunity to set and reach equity goals, after which you are able to sell the property to turn a profit and move on to something new.
As an investor, using your leverage to increase your assets without spending your own money is one of the wisest moves you can make. For example, you can use the bank’s money via a loan to purchase property, and as a result, grow both your wealth and assets without spending a dime of your own! After all, from a savings standpoint, the goal is to keep your money in your pocket and this is just one way to do so. A great Alaska specific loan program to review is through Alaska Industrial Development and Export Authority (AIDEA).
If you plan and budget properly before making any investments in Alaska commercial real estate, then it is quite possible for your properties to save you money by way of positive cash flow. For instance, pre-tax positive cash flow is when the income you receive exceeds your expenses. After-tax positive cash flow is when your expenses exceed your income, but using the tax breaks afforded to investors, you still come out ahead.
Inflation is one of the greatest ways Alaska real estate investors can save money as both property values and rents will increase, but your mortgage remains the same. Your cash flow will increase with the rising costs of rent and provided that your maintenance costs stay put, you will find that you are able to save money without having to route more funds toward the property’s upkeep.
As mentioned above, there are many tax benefits available to investors in Alaska commercial real estate.