Commercial real estate is a great investment option for both experienced and novice investors. If you’re looking for the best place to try your hand at it, Vancouver is the premier commercial investment destination.
The city is a leader in the international commercial real estate market because its a thriving technological and logistics hub, as well as host to a growing entertainment industry.
When done properly, buying or selling commercial properties in Vancouver can be quite the lucrative endeavour. Learn the ins and outs of the commercial real estate market here:
What is commercial real estate?
Commercial real estate pertains to property used for business or to generate profit. Commercial properties typically house businesses and offices, or are residential complexes that offer housing such as apartments or condominiums.
Why should you invest in commercial real estate?
A strong commercial real estate sector makes Vancouver one of the premier places to invest internationally. Grow your investment portfolio and diversify your assets when you invest in commercial real estate in this city.
You can opt for both a long-term and a short-term investment in commercial real estate. Lease your property to generate a steady cash flow or flip and sell it for a quick profit. The market’s flexibility lends itself well to changing trends and investment goals.
Different types of commercial properties
When looking for commercial real estate properties for sale, you’ll encounter several options. Commercial properties come in all shapes and sizes, from large multi-use properties to simple rental units. Here are some examples of commercial properties in Canada:
- Multi-residential property
- Low-rise, mid-rise, and high-rise apartment buildings
- Mixed-use commercial property
- Specialty commercial properties (e.g. golf courses)
- Industrial and shopping malls
- Retail stores
- Office buildings
- Warehouses and industrial facilities
- Land developments
- Medical facilities
- Hotels and resorts
Each property has its distinct advantages and disadvantages. Look at your financial goals and study each type of property carefully to figure out which one best suits your needs.
Kinds of commercial real estate loans
You have an array of options when it comes to financing your commercial real estate purchase. Check out the following mortgage options to find out what’s most ideal for you:
- Commercial real estate mortgage loan – This is a long-term fixed-interest mortgage loan similar to a residential property mortgage.
Key considerations when taking out a loan of this type are the your loan-to-value ratio, (the property value the bank will finance), the amortization period (the payment period), and the bank’s flexibility for repayment.
- Refinance loan – This loan allows investors to transfer debt obligations from one lender to another. This loan type is ideal for those who want to take advantage of lower interest rates.
- Interest-only loan – The recurring payments for this loan only include the interest and not the principal loan. Buyers will have to pay for the full principal amount once the loan term is over.
- Hard money loan— This is a short-term financing plan from private investors. Interest and upfront fees for this loan are usually higher than the standard and its payment period lasts from six to 24 months.
- Bridge loan – This loan offers interest rates of between 6.5% to 9%, and a term of up to three years. Bridge loans are typically used when refinancing loans.
Buying commercial real estate
Here are a few tips when a buying commercial investment property for sale:
- Create financial goals
Before any investment, you need to know what you want to achieve. Do you want a long-term investment? Can you handle the responsibilities of a leased property? Are you looking to turn a quick profit?
You need to have a clear picture of what you want out of your investment so you can work your way towards that goal.
- Research the market
Look at the different commercial real estate lease listings and the latest commercial real estate trends to get the lay of the land. Understanding what’s happening in the market will give you better insight on possible investment opportunities. This will also give you a firm grasp of the possible risks involved.
Hire a commercial property real estate agent
Investing in commercial properties can be overwhelming. Give yourself an advantage by hiring a real estate agent to guide you. With a commercial property real estate agent, you won’t have to worry about any investment missteps.
Ready to invest in Vancouver’s commercial real estate market? Get in touch with the most trusted real estate professionals in town — TeamW Realty. With a combined 20 years of expertise, this award-winning realty team can give you the best real estate experience.