Real estate is a popular means of business worldwide that mainly deals with the land and improvements including building, fixtures, roads, structures, and utility systems. Real estate business deals with buying, selling, management, operation, or investment of land and buildings. The market of this business is enormous, can you guess how many homes can be sold in a year? The National Association of Realtors revealed that 5.34 million existing and 0.667 million homes were sold only in the USA in 2018. Although the market is huge, there is intense competition in the market. There are two ways to make profit from real estate, one from increasing the value of the property, another is from the rental income. Alternative options for real estate investments are Real Estate Investment Trusts (REITs), Mortgage-backed Securities (MBSs), Mortgage-based investment corporations (MICs), and Real Estate Investment Groups (REIGs).

Canada is one of the strongest economies in the world and it is growing steadily even in the surge of COVID 19 pandemic. The consistent growth of the economy shows that Canada is becoming attractive for all businesses, small or large, new or old. At the global level, the real estate market of Canada is not being valued as it should be but the local market is lucrative with low housing inventory and buyer frenzy this year. The market conditions of the real estate business vary from city to city but still this sector of Canada is a nice place to invest. There are many reasons you will observe for investing in this sector such as profitable rental property although there are risk factors too. Below presented a short guide to investing in Real Estate in Canada.

Decide Where to Put Your Money and Effort In
As mentioned, real estate is one of the vast business sectors having a huge market worldwide and there are several options to invest in this sector. After selecting a type of commercial real estate where you are interested, you need to allow some time to find the right investment opportunity. In general, there are four different types of commercial real estate namely Office Space, Retail Space, Multifamily Units, Industrial Property. Office Space is for businesses that don’t need to interact with customers directly in the office where Retail Space is for the businesses that cater the product or services directly to consumers. Multifamily Units include apartment buildings or complexes with five units or more where Industrial Property accommodates manufacturing and warehousing businesses. Wherever your interest lies, there are various nuances that will take years of experience to learn.

Better to Start With a Real Estate Investment Trust
Investment in Commercial Real Estate is complex, as a novice it will be very tough for you to deal with the complexities and survive in the market with your limited budget. You will really find it better to start your Commercial Real Estate business with a Real Estate Investment Trust because they consist of expert professionals who are making the investment in a variety of real estate ventures using your capital. This might be a bit riskier than investing in a government bond but in terms of Real Estate Business starting your career with a relatively safe bet. Moreover, REITs are focused on specific real estate areas that means you can pick one where you find yourself interested.

Determine Your Budget and Stick to It
Establishing your budget is the first thing you need to do if you want to dive into commercial real estate. An experienced accountant can help you in this regard to figuring out the budget and making investment suggestions. In the extremely popular and competitive real estate market of Canada, a novice can easily pay much for his/her first investment if the budget he is working with is vaguely defined. There are challenges, you just need to set a reasonable budget and remain patient until you find the right opportunity to invest your money in. This might take some time, but if you believe in your financial capabilities, you can hardly go wrong.

How to Find the Right Commercial Real Estate Properties
There are various Real Estate Listings, Real Estate agents, Real Estate Investment Clubs where you can search for and find the right investment opportunity for you. Other than these you can approach the owner of the property directly or collect information from your friends and family about a specific property you want to invest in. In this stage, you have to take into account a handful of geographical considerations. You should not choose to invest in a property located somewhere out of easy reach. To understand if a piece of property is best for you, check if it meets all your objectives, also if the vacancy rate is rising or constant, and never go for investment if your investment consultant doesn’t agree with it. If it is a ready property or you are going to construct it, make sure that the roofing is safe and constructed by a recognized organization like London Eco Metal.

Arrange to Finance the Property
If you don’t have enough capital to fully finance the real estate property, go for securing a commercial real estate loan. Getting an experienced commercial broker engaged with the deal can reduce your stress. Remember that the rate commercial mortgage fee is a bit higher than residential mortgage and requirements also a bit stricter.

As the real estate sector is competitive and risky in Canada, make sure you are vigilant enough regarding your financial capabilities and seek help from professionals when needed.

How to Invest in Commercial Real Estate : Guide for Canada by John Brooks | Orbeen