Buying a commercial property is never an easy job. You need to be either an expert or you need to take help of the experts. Here are some of the important factors and processes of making a successful commercial real estate deal. If you think nobody cares whether you are alive or not, just give a miss to a few mortgage payments and you will get the answer. This is a very familiar statement in the commercial real estate world.
It is true by all means that in the real estate world, there is no place for the novices. It’s of very little doubt that if you want to deal in real estate especially in commercial real estate, vast knowledge about this field is the prime necessity. This is not only about the money. The world is full of millionaires making unsuccessful real estate deals. Becoming familiar with the market condition is important for a successful deal. And this is something that doesn’t come easily. So what exactly it takes to buy a commercial real estate property? Well, this is not a matter of one or two things. Even the experts have failed in this field. What you need to do is to plan the whole thing in advance. Calculate the risk of buying property in advance There is no doubt that if the deal goes well, you can make a handful of cash but start with considering the negative aspects. What if the deal doesn’t pay off? It is often seen that leasing property is a much better option than buying one. May be the hot property of today becomes not so popular in near future. May be the area you have chosen for the commercial property becomes ‘not-so-happening’ tomorrow. These scenarios may seem to be impossible today but the history of commercial real estate has witnessed such things before. Consult with a team of experts You may not be a commercial real estate expert. Had you been so, you would have not taken any interest in this article. So, the best way is to start by consulting an expert or a team of expert. Imagine you are going to invest in commercial real estate in Scarborough; you should always get in touch with an expert consultant who not only exchanges some important advice, also offer some property options as well. The advantage of working with a native consultant is the knowledge they offer about the local commercial real estate market. Don’t miss out to have a chat with a proficient tax consultant during the process. How much your business can afford and what would be the amount to be paid for tax is a complex calculation and certainly requires professional help. Choose the right property There are a lot of things to consider while selecting the property for your investment. The first thing to consider is the location. This is the prime factor. You always want to be in good touch with the main commercial place of the city. An ideal commercial real estate should be surrounded with all the required amenities. Customers should find the place convenient to reach. Once the location is finalized you need to look at the physical condition of the commercial property. If this is a new one, it’s fine. But if the property is a used one then consider what the property was used for? Consider the legal limitations as well if there is any. Make sure that the place allows you to do what you need to do in your business. The opportunity of expansion of the property (if the business grows as per the plan) or leasing the property (if it doesn’t work out) should be available. This is a prime consideration at the time of buying. Make the purchase Now that you are done with the location verification and with all other important things, it’s time to talk to the owners about the payment procedure. In the earlier days banks used to offer attractive financing options but that has become the story of past. In order to grab a good deal from your bank, you have to maintain your business account quite rightfully. If everything is fine, you will not find any difficulty buying you commercial real estate property in Scarborough or anywhere else. Rumi Realty Point is a local brokerage specialized in Scarborough real estate market. Rumi team of professionals offers end to end services for commercial, residential and real estate investment projects.
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Despite having a marginal downfall in the worldwide real estate market, Scarborough, Toronto, is one of the areas that has been able to put up a great show. There are few factors about the place that are actually driving the growth of real estate market. Dealing with properties or real estate has always been a great concern for the people from all walks of life. There is no secret to the fact that buying or selling property is not a cakewalk and one needs to take lots of major and minor factors into account to successfully accomplish the deal. However, that doesn’t hold anyone back from investing in properties to meet their financial as well as family requirements.
As far as the worldwide real estate market is concerned, things seem to be going through a bad patch over the last few years or so and studies and reports are claiming that the demand for properties is going downwards. That’s true to a large extent but the picture is not just the same in everywhere. Take example of Scarborough, Toronto. Real estate overview in Toronto While the demand for buying or selling properties is on a rise, there’s been a comparative downfall in the demand for rental houses since the end of the last year. This clearly suggests that people are more interested in buying or selling properties rather than putting them up for rent. There must be reason for that! According to the studies by one of the largest brokerages in GTA, Re/Max Hallmark Realty Ltd, the average price of detached home in Toronto has crossed the $1 million range but the biggest profits are being made from the houses sold below the million dollar range. The part of the city that is leading in this rising game is Birchcliffe/Cliffside with a whopping 25.4 percent price hike in the home rate figuring $724,187 as of June compared to $577,567 in the last year. The next in the list is Cliffcrest/Scarborough Village/Guildwood with a percentage of 23.9 per cent. The rate which was $609,047 last year has risen to $754,437. The Rouge/Malvern area has experienced a growth of 19.2 percent. The property price has risen to $621,912 from $521,643. Apart from that, areas such as Parkdale, High Park and North York have also experienced substantial growth. Properties in Scarborough is in great demand The moderate and soothing climate can also be another good reason to help growing the real estate market of this place substantially. It is the home to an earthen cliff formation popularly known as Scarborough Bluffs. However the climate is modest because of its southerly location in the country and the proximity towards Lake Ontario. The summer is humid and warm and the winter is cold. However the condition varies significantly based on the proximity to the lake. Areas close to the lake are noticeably cooler in hot summer days as well. Last but not the least, the economical growth of Scarborough has also contributed to the recent advancement of the real estate industry in this place. Aside from these reasons, the availability of properties attracts the buyers by offering them the suppleness of choosing the right residential property as per their needs. More so, the lower interest rate and the political safety are also amongst factors that the buyers or even the sellers would like to ensure. Considering all these major and minor factors, this can be said that investing in properties in Scarborough is safer with great potential returns. Rumi Realty Point is a local brokerage specialized in Scarborough real estate market. Rumi team of professionals offers end to end services for commercial, residentialand real estate investment projects. There are two schools of thought on the subject of competition: one is to get as close to your competition and let them know you’re gunning for them. The other is to stay as far away as you can!
Your competition may decide to spend money and resources to bring clients to your area and you can stand to directly benefit from the crowd just as many restaurants and retail outlets do. For example, retail store may spend a lot of money on promoting a new location and if your store is nearby people, although they may initially come to that store, may see your store and be intrigued enough to come pay your business a visit. If you’re choosing to open your restaurant business at a location with many restaurants, then be prepared for competition because customers will have a lot of options available to them. But, if you’ve had all of the other restaurants food, and you are sure that your food is head-and-shoulders better than theirs, and you’re confident that eventually the customers in the area will prefer your food, then you may want to open in a restaurant heavy area. Or you may also realize another benefit of a restaurant heavy area is that people may go there, unsure of what they want to eat, and may choose your restaurant. On the other hand, for many manufacturing companies, access to highways, a good labour market, and closeness to suppliers are more important factors to them than being close or far to their competitors. Doing demographic research is important for customer-related reasons but it may also help in other areas. For example, if your company needs part-time employees that can be trained for relatively high or medium skilled work, you may want to consider locating an office near a university. Students will be either travelling to the university or living there, making it easier for them to commute and be available; and many students often look for part-time work when they’re not at school. In any case, it’s important to do thorough research of an area’s demography and competition in order to have a solid understanding of what that location would mean for your business. By: Aziz Amiri The old adage “location, location, location,” doesn’t ring truer than when one is choosing the right location for their business. There are a few points to consider when 1. Demography 2. Competition 3. Zoning 4. Future plan 5. Distance to suppliers 6. Is the area friendly to business There is professional help available to investigate these different aspects of location determination when choosing a place to have your business. By: Aziz Amiri In a nutshell, there is no one-size-fits-all answer! It is important that businesses do their own
research into which move would be the best choice. Leasing/renting allows for a more nimble business to see whether or not a location is working for them. If not once their lease runs out, they are free to find somewhere else to do business. They don’t need to worry about having to sell the building or other issues that may arise if they were landlords of the building. Of course, some may see renting as wasting money as purchasing the property would allow one to pay down the mortgage or take advantage of tax benefits and enjoy market appreciation. Also for renters, once the lease runs out, it is up to the owner whether they will allow you to stay or whether they choose to raise prices; which could put you in a pickle if you are unprepared for it. Buying has its advantages and disadvantages as well. An owner would also stand to benefit from the appreciation the building may have accrue. You get to build equity with your monthly payments instead of building equity for the owner of the property if you were leasing. You also run the possibility of perhaps renting out parts of the building if you choose to downsize or if it becomes more profitable to rent than for you to use to the space. However, a lot of responsibility comes with ownership: you are on the hook for maintenance; if you have tenants, they’ll look to you to solve their problems; there can be fluctuations in the value of your property as the market changes (this could be good or bad); it can have a very large upfront cost which could be used better to further your business; and so on. In either case, it is crucial to have a professional and expert team to help you with your commercial endeavors: from the broker or sales representative, to the lawyer, to the accountant, to the commercial mortgage broker. By: Aziz Amiri |
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