Have you ever thought about going into business for yourself? It can be exceptionally rewarding emotionally and financially. Running any type of business can be hard work, but you're probably not afraid of that! It's knowing how to get started that's the real issue.
You can carry on looking at ways to make fast cash, the additional money can be useful and it will help while getting your commercial property investment online. However, if you want real financial security it's time to invest in yourself, think bigger, and look long-term.
Fortunately, purchasing commercial property isn't too different from buying your own home. That means you already know most of what you need to do.
Decide on the Type of Property You Want to Invest In
You can buy to let long-term or short-term, you can flip properties, or build from scratch.
Create a Business Plan
The business plan shows you income, and expenditure, and helps you reach your goal. It's essential to raise finance.
Sort Finance
Banks, commercial lenders, and private loan companies; there are many options to help you secure commercial building finance.
Find Your property
When you're ready, simply start looking for the property that suits your budget and intentions.
Why Choose Commercial Property
There are several reasons to choose commercial property over residential options.
Long Term Investment
Commercial property is generally a better option than purchasing a second home. A second home is likely to increase in value and you may generate some income from renting it out if you choose to do so.
However, if you want to use the home you're likely to struggle to cover the costs of purchasing the property with a few vacation rentals. In short, it will be a drain on your finances and there is little opportunity to scale your investment up.
However, commercial property is designed to be let all the time, increasing your income and the ability to cover all costs. Not only will your net worth increase, but you'll also be able to use the equity in your commercial property to purchase another. It's possible to build a lucrative commercial property portfolio that will give you financial security for life.
Variety of Options on the Market
When looking at commercial property you can choose between offices, retail space, industrial, leisure, and healthcare. That emphasizes the beauty of a commercial investment, the property is always going to be needed for something.
In addition, the array of locations to choose from is impressive. There are commercial properties for sale in Calgary for under $1 million, offering approximately 60,000 square feet of space, with virtually guaranteed income. That generally makes it a better option for your first commercial property.
Equally, there are commercial properties available in Toronto for closer to $3 million offering just 3,000 square feet of space.
Your location and the type of commercial property you want will dictate the price and the potential income.
It's worth looking at all options before committing to a property type. But, there is an option for everyone.
Easier to Run as a Business
Renting your second home to tourists can help cover the costs. It can also be difficult as you will have an emotional attachment to the property. It will cloud the judgments you make and potentially cause you to miss income opportunities.
In contrast, a commercial property is purchased simply to generate an income. You will run it like a business, keeping emotion out of the picture.
That makes it a better option than a second home or even a residential property.
You should also note, that commercial leases tend to be a minimum of five years. Residential rentals are for six or twelve months only. In other words, it's easier to guarantee an income when renting a commercial building.
Low Risk to Personal Wealth
Starting a side hustle to generate additional income invariably means operating as a sole trader. If anything goes wrong and your small business owes money that it can't pay, creditors will chase you personally.
In short, your personal finances could take a hit. That's not the case with a commercial business purchase. You'll need to create a company. While this does involve more paperwork, it also keeps the business separate from you.
That means you can't be held personally liable for the business, no matter how badly it does. It is worth noting that the deposit for a commercial mortgage is generally larger than a residential mortgage. You'll need to factor this into your calculations. Private equity investors can often help with this part of the process.
Summing Up
If you're serious about creating a secure financial future for yourself, it's time to aim for the stars. Purchasing a commercial property can be an excellent way to achieve financial independence and security. You have everything you need to start the process today.
*This is a collaborative post. All views and texts are my own.
