As a successful business owner, you might be considering the purchase of real estate in your business’s name. Learn more out the process in our latest post!
Buying real estate isn’t just for individuals, businesses can purchase real estate as well. Buying real estate under your corporate name is completely doable. In fact, it is done by buyers all the time. Keep reading to learn more about buying real estate for your business in Fort Myers.
Residential Properties As An LLC?
Investors frequently opt to utilize an LLC (Limited Liability Company) when acquiring property for two primary reasons: to safeguard their identity from public scrutiny and to leverage the protective benefits offered by an LLC structure. Employing an LLC for property acquisition serves to mitigate the owner’s liability, shielding both their income and personal assets. This strategy is often employed to enhance the value of the LLC through the inclusion of a real estate portfolio. Generating revenue through leasing out residential or commercial spaces is a common avenue for LLC profitability. It’s essential to manage property taxes and other homeownership expenses through the LLC. Given the potential impact on property taxes, consulting with your accountant prior to finalizing the purchase is advisable.
Commercial Space – Should You Lease Or Buy?
Should You Put It In Your Name Or The Businesses?
Many business owners will opt to put the property in the business’s name as to protect their personal assets in case of a lawsuit.
Does buying a commercial space for your business really make sense for you?
There are many tax benefits that come along with purchasing property as your LLC. You will also have the feeling that you are in control. You won’t have to worry about the properly maintained because you are the one in charge of it! You will not have to ask to make changes to the space no will you feel like you are on someone else’s turf. If you are ready to purchase a space for your business, ask yourself some of these questions first.
Do you want to deal with property maintenance?
Similar to owning a residential property, owning a commercial property demands ongoing maintenance, which can be both time-consuming and costly. The interior of the building may require regular upkeep, such as HVAC system maintenance, plumbing repairs, and routine cleaning to ensure a safe and comfortable environment for occupants. Additionally, the exterior of the building must be kept in good condition, involving tasks like landscaping, parking lot maintenance, and exterior painting. Neglecting these responsibilities can lead to a decline in property value and may pose safety hazards. Therefore, property owners must stay vigilant and proactive in addressing these needs to preserve their investment and attract tenants or customers.
Opting to lease a commercial space can transfer a significant portion of these maintenance responsibilities to the tenant, often outlined in the lease agreement through terms like “triple net” leases, where the tenant handles taxes, insurance, and maintenance. However, even in such arrangements, the property owner must ensure the tenant adheres to these responsibilities and that the property remains in good condition. This requires regular communication, inspections, and sometimes even intervention if the tenant fails to meet their obligations. Whether the property is self-managed or leased out, owners must have the requisite time, energy, and budget to manage maintenance effectively. This involves setting aside funds for unexpected repairs and routine upkeep, as well as being prepared to address any issues promptly to avoid further complications. Proper maintenance not only protects the property value but also ensures a safe and pleasant environment for everyone who uses the space.
Do you plan on staying for the long term?
Buying a commercial property makes sense if you plan on being there awhile. Sure, anything can happen in the business world, but if your intent is to stay long-term, your costs will be less overall. Renting a property, without anything to show for it can cost you in several ways.
Turn Your Real Estate Into Extra Income
A savvy approach to generating passive income and offsetting property expenses is to purchase a property larger than your own needs and lease out surplus space to other local business owners. This strategy offers numerous advantages, such as supplementary income streams derived from renting out the excess space.