Finding good investments in what has been considered a recession economy has been difficult. As a result many investors have been looking to the combined benefit of investment through tax advantages and growing value. While the stock market offers good tax advantages and liquidity, the volatility of the investment has led many to shy away.
Benefits of Commercial Real Estate Investing
Some have found that commercial real estate offers excellent tax benefits, even better than that of the stock market. On top of that the stability of the real estate market throughout history has been great. The problem with commercial real estate investment, though, is its liquidity. However, a solution has been found through professional investment real estate firms such as MPD Development.
Find Liquidity and Stability with MPD Development
MPD Development combines the best of both worlds by getting investors the tax advantages and stability of commercial real estate investments with the liquidity similar to that of the stock market. According to MPD Development, tax advantages through commercial real estate are even better than a lower capital gains tax as the IRS will allow investors to write down the investments increasing the value of the property. Additionally, MPD Development uses depreciation to shelter other income. Similar to a 401k, commercial real estate investment with MPDD increases the value of investment while providing great tax benefits.
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Investing in a recession economy like we haven’t seen in nearly 80 years is a daunting task. Even common wisdom can sometimes be turned on its ear and safe harbors can become dangerous waters. In such times, real estate investment has proven itself as being able to provide a reliable, generous return on investment. The best way to invest in the real estate market, however, is not to buy individual plots. Investing through a real estate development company like MPD Development (MPDD) enables the private investor to spread funds amongst more than one property, just like an index fund diversifies in the current balance of the Dow Jones or NASDAQ. Let’s look at five reasons why MPDD is the optimal commercial real estate investment
Risk Minimization Through Diversity
The real estate market has a low correlation with most other assets. The market cycle for commercial real estate investment does not follow stock and bond performance. This insulates investment funds from the turmoil in the stock and bond markets as bubbles burst and bear markets set in. Removing funds from the daily ticker and the woes of Dow Jones is not only a solid business move, it also provides peace of mind.
Tax Advantages
MPD Development offers the tax advantages of real estate investment above and beyond the stock market. Even better than a lower capital gains tax, the IRS allows you to write down the investments made to increase the value of commercial real estate. This allows MPDD to increase the value of their holdings even beyond real estate upgrades through tax benefits. Depreciation on property allows MPPD to create a tax-deductible expense to shelter other income. Just like money saved in a 401k, investing in commercial real estate boots investment dollars with tax leveraging.
Stability In Unstable Times
Historically speaking, commercial real estate has been a stable investment vehicle. Housing values have made a steady march upward for nearly 60 years on average. Overall yields have been in the double digits for many decade long periods with the time-weighted average not far behind. Common wisdom is that past performance does not guarantee future returns, which is true, but investment in commercial real estate has a proven track record regardless.
High Reliability
Real estate investment through development companies like MPDD has an extremely low amount of value fluctuation. While the stock market jumps and dives, real estate values have taken a much steadier track. The standard deviation is 40% lower than on bonds, making real estate investment one of the best vehicles for steady gains without drastic losses.
Short Holding Periods
Liquidity is an important quality for any investment to allow the intelligent movement of funds in quick reaction to market conditions. The holding period has plummeted from about 10 years in the 90’s down to months in recent years. No longer is a real estate investment going to tie up funds longer than necessary.
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