6 Reasons to Invest in Canadian Commercial Real Estate in 2015

Image Source: Marcell Katona

Image Source: Marcell Katona

Aside from all the uncertainty about the stock market, potential technology bubble and oil prices, here are some very basic reasons Canadians should be embracing commercial real estate investing in 2015.

1. Returns

While some have been saying that Canadian housing prices have been going up briskly, the country has continued to boast some of the highest and most reliable commercial property investment returns in the world. Even if they were to moderate some they would still likely outperform most other options, while presenting less risk than other options.

2. Wealth Preservation

Following on from the above; one of the best advantages of real estate investment is holding a tangible hard asset. Stocks and companies can be evaporated by unforeseen factors in just days. Land and bricks and mortar on the other hand aren’t going anywhere. Even in the most dire downturn the asset isn’t going anywhere, value can be added with improvements, and will come back over time, and income can still be gleaned in the process.

3. Wealth Growth

Even though commercial real estate values can fluctuate over time, they have invariably proven to bounce back and come back higher than before. In comparison with the rest of the world Canadian property prices have been growing relatively conservatively. Real estate is one of the best vehicles for wealth growth that is effective in beating inflation, with low risk.

4. Income

Commercial real estate is a great vehicle for passive income generation. Residential real estate can provide income too, but has more quirks and is definitely more management intensive for individual investors. Those looking to supplement current income, position their finances to support an early retirement with investment income or are already in or approaching retirement and need to make their nest egg stretch further should seriously consider commercial income producing properties as the solution.

5. Tax Reduction

Taxes can be one of the most significant adversaries of individual Canadian savers and investors. It doesn’t matter how great the promised returns are if the tax consequences eat them up and more. In contrast, real estate offers a variety of tax benefits, which can be layered with more advanced tax strategies. The end result can easily equate to double digit improvements in net annual investment returns.

6. Investing in the Community

Commercial real estate is the core of the community and local and national economy. Whether it is offices that house workers producing, multifamily properties that provide shelter or retail which keeps economic momentum moving and jobs growing, commercial real estate is critical.

In summary; there are enough core reasons to invest in commercial real estate at home in Canada in 2015 that individuals will be well served by doing so and even if they are already may seriously consider weighting their portfolios even heavy with this asset over the next few months.