Commercial Investment in Real Estate with Tav Schembri

Learn why commercial real estate may be preferable to other types of property.

Investing in commercial real estate (CRE) is very different from stock market investing. Similar tactics and risks still apply, though. Because it has the potential to produce higher returns and offers additional tax advantages, CRE appeals to many investors. However, if you're interested in this type of investing, a local Caledon agent suggests that understanding when, what, and how to invest in commercial property is a critical factor in success or failure. Here is how commercial real estate operates and how you can include it in your portfolio of investments.

Why Should You Invest in Commercial Real Estate?

An investment in commercial real estate typically requires a sum of money that is beyond the means of a single retail investor. According to experienced real estate agents in Caledon like Tav, the most popular ways to invest in commercial real estate (CRE) are through fractional ownership or real estate investment trusts (REITs). Compared to other conventional investment options, CRE investments offer the following advantages:

• Being real estate, it is protected from changes in the market. It is stable and generally has a steady rate of return as a long-term investment option.
• It has a lock-in period that protects your investment and guarantees returns.
• Any special-purpose CRE in a prime location can be a veritable gold mine, say the top land specialists and development agents in Ontario. It will be so because the land will be in high demand from a specific group of tenants, guaranteeing that the investment will continue to generate returns as passive income.

But What Should You Know Before You Start Investing?

There are a few questions you should ask yourself before deciding whether or not CRE investing is right for you. Which of the following should you choose as your first investment: a single property, a REIT, or a crowdfunding option? Local real estate agents in Toronto suggest that before you start investing, bear the following in mind:

Understand Market Cycles

Nothing lasts a lifetime. The GDP, unemployment rate, and general health of the economy are all directly related to how profitable commercial real estate is. You can avoid buying when the market is strong and having to sell when the market is weak by understanding how real estate market cycles operate. Additionally, understanding specific market cycle indicators will help investors identify current opportunities and make better investment decisions.

Do Thorough Due Diligence

During the due diligence period, a potential investor can thoroughly investigate the investment opportunity. This can involve looking over the previous owner's financial records, paperwork, tax returns, and profit and loss statements, as well as conducting surveys, property inspections, feasibility studies, or any other required research. Before creating a comprehensive and detailed due diligence checklist for your CRE property type, keep the following in mind:

• Verify that the zoning will permit you to use the property as intended if you intend to develop vacant land.
• If you want to construct new buildings or expand existing ones, consider how many more units the market will bear.
• Learn about the costs and permitting requirements of the city or municipality where the property is located.

Having the best agent in the GTA on your side at this time could be beneficial in this case to help you do thorough due diligence. Are you now considering investing? Here's your best choice:

Tav Schembri: "The New Generation of Real Estate"

Tav Schembri, Broker of Record at RE/MAX Specialist Tavsells, is the #1 ranked agent in Caledon, Canada, and worldwide with REMAX. He accomplished this in less than six years, which isn't bad for a small-town local, is it? Tav is the best agent in Caledon and specializes in both rural properties and farmland as well as residential homes, serving a wide area that includes Peel, Wellington, and Dufferin, as well as the GTA and the surrounding area. Tav has also built a strong foundation in commercial real estate through ongoing development projects. His office is located at 14980 Hurontario St., in Caledon, and can be reached by telephone at 416-206-8164.