For most Americans, when they retire, their biggest asset is their home. It has appreciated a lot since they bought it and if they have borrowed against it as the value went up, they have a lot of equity in it. This equity in their home is often their retirement money.
What about your place of business? Do you rent it or own it?
There are reasons not to buy it, such as – you are growing and will need more space soon, you don’t want to tie up capital to pay a down payment, or you really aren’t sure what the future will hold.
However, if you are going to occupy a building anyway, you may as well own it and build equity with each payment, instead of paying rent to a landlord who builds the equity for themselves. If this is right for you, in 20 years you’ll own your facility and it alone can be a source of value for retirement, even if you don’t sell your business.
The key to successful commercial real estate investing is to have a good tenant for the long term. If you are one, you may as well be your own tenant and start building equity.
Sorry everyone – that’s if you DON”T borrow against it. My bad! -Larry
My hands were burned once and it wasn’t easy to recover but I am going to give it another try. I am so much more experienced and now I know what to watch out for. I am stronger and more capable than I was. All I need is a little luck. I learned that I am not a superhuman so from now on I will lead a humble responsible life while I keep an eye on my own and my teams plimsoll line.
You are correct . Bought our building which is only 5000 sq feet 30 years ago and in that time it has allowed us to collect 900,000 in rent . We still own it with with a 2 year lease . We will be able to sell it and none of the proceeds are needed to retire . It’s all about long term.