| There are basically five different ways in which | | | | depreciation on building is tax deductible |
| you can make money by investing in commercial | | | | expenditure. When you arrive at the profit before |
| real estate. | | | | tax, you are allowed to account the expenditure |
| Strategy 1: Building equity. | | | | on depreciation of assets as an operational |
| The key way to make money in commercial real | | | | expenditure. This way you have to calculate the |
| estate business is by building up equity in the | | | | percentage of tax on a lower amount. It is |
| property. You can do this in four ways that are | | | | however important to note that depreciation can |
| mentioned below. | | | | be charged only on the building but not on land. |
| The first way is to buy the property below its | | | | Strategy 3: Charging suitable rent. |
| market value. To do this you will have to do your | | | | It is important that the property generates |
| due research, you will have to find out the needs | | | | enough rent so that you can easily cover the |
| of the buyer and you also have to be good at | | | | expenditure if its maintenance and can also cover |
| negotiation. | | | | the interest payment of the mortgage. But you |
| The next way in which equity builds up is through | | | | should not stop there, it should be your goal to |
| the appreciation of property. You can easily | | | | try and get additional rent so that you can pay |
| ensure that your property appreciates by | | | | off the debts and thus create equity. |
| marinating it properly and undertaking the | | | | Strategy 4: Attractive financing schemes for the |
| necessary repair work. It is also important to buy | | | | buyer. |
| a property in a location that promises to grow. | | | | When you are selling your property, you can |
| The third way to build equity is by paying down | | | | fetch a better price if you offer convenient |
| debt. The key to this strategy is to try and get | | | | payment schemes to the potential buyer. For |
| the lowest interest rate possible on your debt | | | | example, if you allow the buyer to pay in easy |
| instrument. | | | | installments and do not want a heavy down |
| The fourth way in which you can create equity is | | | | payment, then the buyer may be willing to pay |
| the time when you sell the property. You must | | | | you a higher over all price. |
| try and sell you property at above market value | | | | Strategy 5: Add value to your property. |
| and to do this you have to put in effort to find | | | | You can add value to you property in various |
| the right buyer and again you have to have good | | | | ways. Try and make strategic improvements in |
| negotiation skills. | | | | your property that will help you to increase its |
| Strategy 2: depreciation of property. | | | | worth. You can also put your property to higher |
| You can save a considerable amount of tax as | | | | and better use to increase its worth. |