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Shawn Phillips
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Cell:702-279-3512

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To Loan or not to loan?

Author: Diana Heeb Bivona

Deciding to take out a loan to cover a real estate purchase, regardless of whether it is a $500,000 residence or a $15M office building, is a major, often ulcer-inducing experience for many. For all the discomfort and worry though, there are several benefits to taking out a commerical real estate loan including:

  • Interest on the commercial real estate loan is tax deductible
  • You can take annual depreciation deductions on your taxes
  • In the long run, you’ll probably come out ahead because you won’t be facing rent increases
  • You’ll benefit financially if the real estate market is good when you sell
  • You may be able to lease out a portion of the building if you determine you have excess space
  • If you need to make substantial changes to the building to accommodate your business, those changes are owned by you rather than your landlord
  • Determining if a loan is the right way to go requires a look at several factors outside of just your individual financial circumstances. Start by doing your homework. Performing a detailed cash flow analysis. Also review current trends and future predictions regarding your local market. Arming yourself with information and solid research can make a world of difference not just in your own mental well-being, but in choosing a right loan package to meet your needs.

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