Are you relatively new at investing in real estate? Which type of commercial real estate asset would be a good match for you? You might consider purchasing a retail plaza over a residential building. Today's market shows a growing interest in retail properties, neighbourhood strip plazas and retail plazas which offer would-be investors several distinct advantages over residential properties. Here are a few.
Retail plazas have a higher earning potential than residential properties. Returns are usually higher for retail investments than office spaces due to longer lease terms. With the Canadian real estate market growing steadily to match urbanizing trends, now is the time to invest in commercial real estate.
Simply put, retail businesses operate during business hours. As an investor, this suggests you will also work during business hours. You do not need to worry about midnight calls from residential tenants regarding lost keys or overflowing plumbing. Residential properties can lead to a lot of ‘hand holding’ and personal involvement in the details of your tenant’s lives. Barring technical, structural or mechanical emergencies, your schedule - or your property manager’s schedule depending on your level of involvement - will reflect this major distinction.
Your tenants are professionals just like you. Your relationship will be a business relationship, rather than the landlord and tenant relationship that occurs in residential property investments. Business owners are more likely to behave courteously and respectfully. They also have a stake in property appearance. A run down building does not attract customers. They rely on a clean storefront to draw in a clientele, freeing you of the worry that comes with unkempt residential properties. In short, one could argue that business owners make better tenants than residential tenants.
Commercial real estate is free from emotional pricing. The previous owner (see Vendor) rarely has an emotional attachment to the property. Knowledgeable brokers can provide you with the previous owner's income statement. With a commercial property, the prospective investor can calculate an asking price based on the property's earning cap. Our brokerage service provides sophisticated due diligence process. Meaning, you will evaluate the earning potential and risk with a team of experienced underwriters and brokerage specialists.
Future Of Retail Plazas
As Canada's economy continues to expand, especially in light of the recovering U.S. economy, retail spaces are in high demand. Invest in a retail plaza and enjoy the comfortable schedule, professional relationships, and income potential provided by your new investment. For help finding a retail plaza near you, contact us.