How to Develop a Commercial Property Investment Strategy
Investing in commercial real estate property in ever expanding provinces like Calgary can provide great returns, if you do your research. But due to constant fluctuations in the market, it helps to proceed with the help of a commercial property investment advisor in Calgary, such as ReDev Properties, can help you develop a commercial property investment strategy to gain the most from your investment. Keep reading to learn more about developing an investment strategy.
Why invest in commercial property?
One of the biggest benefits in investing in commercial properties is gaining a higher rental return than residential investments. Commercial property net income returns are typically around 7-9% per annum compared to 2-4% per cent per annum for residential properties.
In order to maximize earnings, it’s better to invest in sectors that are in particular rental demand; keep an eye on what trends are influencing the market, or work with commercial property investment advisors like ReDev who can help you identify and follow the trends.
Many private investors are using commercial property investment advisors to invest in commercial property in Canada. Often high-rental income properties have a trade-off of low-capital-growth rates, so it pays to seek financial advice from an expert before making the decision to invest.
Diversify your portfolio
In a fluctuating economy, it can be beneficial to diversify your investment portfolio in order to spread the risk of your investment. Commercial property sectors offer a lot of variety, such as retail, industrial, offices, hotels, healthcare, and retirement living, to name a few.
Apart from stocks and bonds, there are other assets you can invest in. They offer one more way to diversify your portfolio. Real estate investments are primary alternative assets that investors prize, as these investments offer cash flow because the properties generate rent. Diversifying can be challenging, as there are several assets to consider. Talking to commercial property investment advisors can help determine the best way to diversify your portfolio.
Identify market trends
Knowing the market trends and being able to spot new trends as they form helps to know where to invest and where to not invest. For example, in Canada, it’s Western Canada that offers a lot of great new investment opportunities as cities in this area are currently growing; there is a lot of room for growth and development in provinces like Alberta and Saskatchewan, as the cities continuously improve, the need for new businesses grows as well.