California Commercial Mortgages

California Commercial Property Loans

How To Create Positive Cash Flow For California Commercial Real Estate

Across from Los Angeles to San Francisco, many factors affect the cash flow for California commercial real estate. From Rent Control to the eviction moratorium laws that have a residual effect on California tenant evictions, the landlord’s real estate’s cash flow is adversely affected by the California tenant protection policies for multi-family, mixed-use, and residential apartment properties. 

However, there are solutions to the challenges in California for cash flow and net operating income. For example, depreciation deductions for the California Landlords’ commercial real estate property, whether in metropolitan Los Angeles County or in the suburban subdivisions of Santa Clarita, can reduce your taxable income without reducing your investment property’s cash flow. Therefore, California commercial real estate’s taxable income is often less than an investment property’s cash flow before taxes. However, if you hold on to a California commercial real estate property long enough, you’ll eventually deplete the ability to take advantage of depreciation deductions.

The good news, investors in California who purchase a commercial real estate property, whether an apartment building in San Bernardino, an office building in Culver City, or a self-storage warehouse in San Diego, will enjoy the tax benefit of restarting the multi-unit investment property ability to begin depreciating as an accounting line item based on the California commercial real estate’s purchase price. 

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