Ninty percent of millionaires reached the million-dollar club through real estate investing. The beauty of real estate is that you don’t need any prerequisites to get started. Even first-time commercial real estate investors can be successful. Here is what you need to know to get you started.
Do your research
The first thing to do before considering a property is to do your homework. There are so many types of options for you to consider: vacant land, single-family homes, multifamily properties, mobile homes and commercial businesses. Each has unique characteristics that need to be understood prior to investing. Once you’ve done some research, you’ll have a better sense of which type of investment is best for your budget, time commitment, and which ones meet your requirements.
You also need to research location. You want a high-traffic area where there is a demand for rentals. The big Canadian cities like Toronto, Montreal, Vancouver, and Kelowna always have high demands. The question is what will be your return on investment?
With suburban properties, you should keep potential future redevelopment in mind. Often, commercial real estate investors will hold land in the suburbs until the development reaches the property.
Consider Strata units
You might also think about a strata unit. These properties are smaller units and can be either office, retail or industrial assets. Basically, you would own a lot containing an individual apartment and common property such as driveways, parking lots, and green space, which is shared. The great thing about strata units is that they are typically under a million dollars in both urban and suburban areas. You get a decent space without the full land cost you’d otherwise pay.
Buy in a place you can visit
Ideally, you want to own a property that is nearby. That way you can stop by on your way home from work or on the way to do your groceries. Plus, choosing a local investment means that you probably have a good handle of the market and the growth going on in your area.
Build a great team of experts
When you are starting out in commercial real estate, it’s impossible to know everything you need to know. We asked Leslie Quinsay, a past Canadian Real Estate Magazine “Investor of the Year” award winner and author, to share some advice for getting started in commercial real estate. Her number one tip is to find a group of experts to help you. An experienced and reputable commercial realtor can provide a wealth of knowledge. You should also find a mortgage broker who deals primarily with commercial mortgages, and a strong property manager who is very experienced in managing whatever type of commercial property you choose to buy.
It’s very helpful to find a seasoned commercial investor to mentor you in the early days of your venture, too.
Are you ready to get make the jump into commercial real estate? Let us know in the comments.
Graduated from the University of Toronto with an Honors BA English Specialization and has completed several publishing courses at Ryerson University. She is a proofreader, editor, and content writer based in London, Ontario.