Commercial real estate is a great investment for those who prepare and plan their prospective purchase in advance.
Planning and due diligence are the cornerstones while arranging your financing beforehand will establish a strong foundation when buying a commercial property.
Here are some basic steps to get you started in the right direction to buy Calgary commercial real estate.
Step 1 Determine What You Want
Your first step is to clearly establish what you want and what you need. This could be as simple as a specific size for office space, or more complex such as whether you want tenants or even a specific type of tenant.
You will want to consider the size of the building and the exterior lot, the number of units and even the condition of the commercial structure.
Basically, you need to draw up your ideal ‘wish list’ which includes what is essential and also what you would ideally like to include.
Step 2. Study the Local Market Beforehand
This not only means the local real estate market but you also need to be aware of the zoning regulations, the tax requirements and applicable environmental requirements.
One of your first steps should be contact the local municipality at Calgary city hall and then to review any applicable provincial regulations.
This relates to your intention or what you wish to achieve with your purchase. If you are buying a property for your own business, you will have different needs and will have to employ a different strategy than someone who is purchasing an existing property solely to generate an income from tenants for example.
You may also need to get some demographic information to understand the availability of skilled labour for your enterprise.
Step 3 Arrange Financing Beforehand
Even before you begin to look at properties it is best to have your financing strategy in place beforehand. Consider all the available financing options you have to clearly understand what you will have on hand. This includes private financing, or using a commercial lender or bank, and even some of your own assets.
Ideally, your aim should be to access other people’s money and not your own.
If you are borrowing, you should find a lender that specializes in commercial property. You will need to clearly understand the lending criteria they require and prepare the information beforehand. The goal is to get pre-approved before viewing potential properties.
Step 4 Screen Properties
Using the criteria that you have already established, your next step is to begin the screening process. The easiest way to find the properties that are of interest to you is to select an established commercial real estate agent so they can begin your search. This will allow you filter through the available properties more rapidly.
As you locate one or more properties, you will have to perform some due diligence and thoroughly research the property.
Step 5. Make the Offer
Once you have a commercial property that you wish to purchase, then all you have to do is develop your offer and submit it. This also requires some research and some likely negotiation.
Planning, research, financing, due diligence and using the right professionals will make your transaction run more smoothly and effortlessly.
Photo by Teemu08
