Investing in commercial real estate, including multifamily and mixed-use developments, offers a number of enticing financial benefits. These include the generation of higher investment returns and various tax incentives. Once you decide to diversify your portfolio and invest in commercial real estate, you need to determine where you want to invest your money. Backing development projects in your own city allows you to strengthen your portfolio and better your community.
At Beach City Capital, we are strong advocates for investing within your own city. For us that means bringing affordable multifamily housing to the Greater Los Angeles area. Here we will share some reasons to invest in commercial real estate that extend beyond dollars earned.
1. Pride of Ownership
Have you ever driven through a specific area in your community and envisioned something better for it? An investment in commercial real estate at the local level can create jobs and help families achieve a better life. Each investment represents an opportunity. It’s a way to generate wealth that you can also be extremely proud of due to the benefits it provides for others.
Many people who invest in local commercial real estate also feel more connected to their community. It is something you can drive or walk by and show to your family. And if you are looking to get more politically involved in your city, investing in a commercial multifamily or mixed-use development project is a way to start a conversation with political leaders.
2. Improve Your Community
Deteriorated and abandoned homes and buildings are an indicator of urban or suburban blight. Blighted properties decrease surrounding property values and they can also have a detrimental impact on public health. There are economic development incentive programs that exist to help revitalize impacted communities through real estate development projects, including affordable housing. Purposeful investing within your own city can make a big difference in people’s lives.
Opportunity zones are one popular example of an investment vehicle incentivized by the federal government to encourage investment in underserved communities. This tax incentive allows investors to get capital gain shelter and deferment and it also benefits your home city.
3. Better Chance of Success
It is difficult to fully understand the economic and sociopolitical climate of a city you don’t live in. Investors who have an in-depth knowledge of their city at the community level — or who choose to partner with a real estate development firm that does — have a better chance of success in their commercial real estate investment. A local real estate development firm can also help you identify the types of projects and trends that work best for different types of communities.
4. Build Generational Wealth
Putting your money into commercial real estate development projects within your community is an investment for the future of your family and the city they call home. Those who invest in their own community create a legacy for their family, including any children they may have. This sets future generations up for success and puts them in a position where they can also give back. Think of it as a generational investment for the betterment of society and your own family.
Impact Investing in Greater L.A.
In the Greater Los Angeles area, where Beach City Capital operates, we help investors directly combat the affordable housing crisis through the funding of multifamily development projects. It is likely that your community could benefit from these same types of revitalization projects. Working with a qualified real estate investment company that has a knowledge of the local market can help you invest in a way that is successful for you and your community.