Any major investment needs plenty of prior thought before deciding to part with your hard-earned money. This is certainly true for commercial property - stores, offices, factories, warehouses and even kiosks. To make this property work for you, there is so much work involved, both in terms of marketing it to tenants and preparing it for sale.
Before investing in a commercial property, you should look at different aspects of what makes it worth buying. Firstly, think about what you want to use it for. Are you planning on buying it to lease to a tenant, or do you want to sell it on after renovating the property? Once you know what you want to buy, then you can begin the property search.
Value for Money
Look at how much a typical property costs in your area. The picture for commercial real estate in Canada suggests that foreign investors may see the country as a viable alternative to the US. If this is the case, try to act quickly when buying a property, or look to an area where potential buyers for the type of property you want are in short supply.
For your property search, look for several examples real estate that have similar characteristics. If you want a 200 sq ft store, look for different stores of that size and see which one offers the best value for money. Ask for a visit to each property to see what they look like and if there are any problems that may cost too much to fix.
Next, look at which broker to go through. There are many commercial real estate agencies who should have the knowledge to help you make an informed decision. Agencies such as GVA can advise you on where the best commercial properties are to buy.
Before you put pen to paper, consider what legal issues you need to take into account. Canadian real estate law is pretty comprehensive and does have a few variances from province to province. When buying a piece of commercial property, there are seven different investment structures, not all of which apply to private companies.
Finally, think about what taxes (if any) you will have to pay. There are taxes on people making money from renting out real estate, amounting to 25% of income made from renting. Be sure to budget for that when setting rental rates, so that your investment is actually worth the money.