With so many advances in the commercial sector, Toronto’s real estate market doesn’t seem to be slowing down any time soon. If the thought of investing in commercial real estate has crossed your mind, then you are not alone. However, investing in commercial real estate can be a time-consuming endeavor which involves a lot of due diligence every step of the way. Without proper planning and precautions, you can face a lot of risk. That being said, commercial real estate still gives you a lot of opportunities to elevate your business as an investor.
So, before diving head-first into the realm of commercial real estate investment, here are five tips that you should keep in mind.
Understand the Local Market
Any decision made without appropriate research is more prone to failure than success. As an entrepreneur, you should always read and understand the business you’re dealing with. Each market has its own tax rates, land inventory and environmental issues. As an example, in 2017 the Bank of Canada raised its interest rates. This had a very massive influence on borrowing and loan rates. You should always look at the interest rate of the area you want to invest in as it affects the demand for commercial and residential properties.
Find an Expert
If you are looking to buy or lease commercial real estate, choosing the right real estate agent can prove to be very beneficial. They have the tools, experience and resources to help you find the right property and negotiate the best price on your behalf. A good Commercial Real Estate Agent will be there for you 24/7 and won’t hesitate to answer any of your questions when buying or selling commercial property.
Get Your Finances in Order
If you are planning to go big, you’ll need to reach get your finances in order out before so that you are able to purchase a property when it becomes available. You should do some research about what kind of loan you need, which bank should you go to, what is your credit score, and would you be able to afford the interest rate? Answering questions like these beforehand will help you get an idea of what you are getting into with a property purchase and if it will be a good investment or not for your personal situation at a given price.
Do Your Homework
We can’t stress this enough: research is the most important thing you need when buying commercial real estate. With so many market factors to consider, you can get lost in the details. Before making a decision, you should look at and tour several different properties. Compare each property in terms of price, location, condition, use, and future aspects. If you are in a position where you are expanding your business with a new location, you should select a property and location that will complement your brand and services.
Buy Something near You When Starting
When starting out, a good tip for most investors is to buy a property in a location that you can visit every day. Purchasing your first commercial investment property that is on your way to and from work will allow you to see it twice a day. This will allow you to have a hands-on approach with the property so that you can save money by managing your commercial investment property personally. This also keeps you updated about developments taking place around your building and stay familiar with the local market and tenants needs.