The thing about purchasing an investment property is that, no matter how many changes you make to the building itself, the location will always be there.
When it comes time to find your next investment property, whether that’s a commercial space or a new business location, make sure you have taken a hard look at the area. Here are some of the important things you should look for to avoid making big mistakes.
Think Outside of the Major Cities
Bigger cities mean more competition, less choice, and a more saturated market. So, for example, buying an investment property in Toronto would be great, but a Niagara tourism property would likely contribute to a higher ROI. Even if you don’t have your sights set on a tourist destination, look for somewhere that has more opportunity for business growth.
Examine the Population
Take a look at some statistics for the area you have your eye on. In particular, note the population growth- has it increased over the last 5 to 10 years? Does it look like it is steadily increasing? This could be a sign that the area is on the rise and expanding.
Look For Current Residential and Commercial Development in the Area
If you’re looking at an area that is undergoing significant development, such as residential developments, hospital expansions, new schools, or even new arenas, that’s a good sign. It means that the municipal and provincial governments are putting money into that area and that it is growing, which means you can grow there, too. For example, the GO Train is expanding to Niagara to meet the demands of commuters and day-trippers alike who populate the region.
Read up on Zoning By-laws
Certain types of properties and areas have different zoning by-laws and regulations that you will be subject to. If you plan on expanding or undergoing some major construction in the future, make sure you will be able to do this and will not be prohibited by local ordinances. You will also need to be sure you will be able to conduct the type of business you want to conduct in that specific spot.
Always make sure you work with a commercial real estate appraiser who knows the area inside and out, who will find you the best property with the most opportunity. They’ll be able to provide you with expert and insider information that will help make your decision as easy as possible.