Investing in Toronto commercial real estate can be very profitable, if done right.
It can be a solid long term investment, yielding handsome monthly profits, if it’s chosen well and run by a reputable Toronto commercial property management company. The list of factors to make it a successful investment includes the property itself, the management company, and the clients that lease parts of it for their own use.
In order to help our readers balance these factors during their first steps towards commercial real estate investment, we have composed this checklist.
Buying Toronto Commercial Investment Real Estate in Five Simple Steps
Determine Your Goals and Needs
Are you investing to lease to other companies, or do you need it for your own use? This makes a significant difference in what property you are better off choosing.
If you are buying to lease, make sure the property answers the needs of companies you wish to attract. The options are mainly office, warehouse and retail space. They all have to meet the demands of the businesses you wish to lease to, in terms of proximity to their clients, transportation and so on. A poorly chosen commercial property may end up standing vacant – losing, instead of earning you money.
If you are buying for your own use, make sure the property meets your needs. It is a long term purchase, so factoring in possible future needs is also a good idea. You don’t want to buy a property that will become too small for your growing operation a few years down the road.
Choose a Toronto Commercial Property
There are many ways to find a good commercial investment property, not least of which is contacting a Toronto commercial property management company. We have recently published an article explaining how a property management company makes a great real estate investment advisor. Review what options you see out there and choose a few that fit your needs. Check out their prices, physical conditions and zoning.
Get Expert Advice
Assembling a team of experts to analyze the risks and benefits of the investment is always a good idea. Make sure you have an accountant, lawyer and financial manager on this team. Consulting with a Toronto commercial property management company is also a prudent move. This team of experts will be able to give you a clear scan of the property, revealing any hidden costs and pitfalls that a casual observation will not identify.
Run Detailed Financial Projections
Get a report on available funds, investment costs (including property management, insurance etc.) and income projections. Compare them to your desired ROI. If you are not going to do much better than breaking even, this specific property may be a poor choice for your needs.
Make the Purchase
Once you have the investment funds, you are good to go for the deal. Make sure to consult your lawyer once more to keep yourself safe from last minute surprises.
We hope you found this interesting and beneficial. Feel free to contact us with any other questions you run into.
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