Inheriting Commercial Real Estate
There are many things to consider when you have inherited commercial real estate. Depending on the priorities in your life you may not wish to take on the burden of maintaining and marketing a piece of commercial property. You might choose to sell it. Whichever you decide, it is good idea to retain a property manager to help you maximize the windfall from your unexpected asset. HighGate in the Toronto area is one such manager that can market your real estate for sale or lease. They can privately consult with you about the goals and expectations for the property, and put together a marketing package should you choose to hold onto the property.
When you decide to sell commercial real estate, you may be liable for capital gains taxes and that amount could be significant depending on how long the property has been yours. A property manager can assess the taxes you stand to pay and run the numbers on what you could expect to earn by keeping ownership and leasing the property. Should you choose to sell, savvy property managers can also help you submit a 1031 exchange form for tax purposes that will allow you to roll your investment into another property to avoid capital gains.
The role of landlord can be a daunting one without prior experience. The costs involved with maintenance on a large commercial building can be very high, and typically require service contacts with licensed vendors for regular maintenance to plumbing, electrical and waste management – sometimes at any time of the day or night in the event of an emergency. A single investor may not be able to secure these contracts, as the larger vendors tend to want multiple properties to be involved. Using a property manager with contracts in place can ensure you will get the best price for any services required and that your jobs will be handled promptly.
When you inherit property, it can be a stressful situation. Not only because of the added responsibilities you may encounter if you already have tenants, but just the pressure and stress of dealing with the loss of a loved one or friend depending on the circumstance. The extra weight of these emotions and tasks is enough to cause a mental breakdown in those not ready for the challenge. This is a good time to consider a property manager that can step in and immediately assist with the situation. Skilled property managers can handle the day-to-day operations of your inherited commercial property, so that you can navigate the transition to landlord at your own pace.
Overall, the unexpected arrival of an inheritance can be a nice windfall, but it definitely comes with its share of responsibilities and constraints on your time and money depending on the condition of your new commercial real estate. For the untrained landlord, your wisest business decision (if you elect to keep the property and not sell it immediately) is to bring in some advisors in the form of a property manager to assess the value and any potential area of concern. The Toronto area has plenty of folks to choose from in the property management field and you should have no problem selling or marketing your inherited commercial property to potential tenants with their help.