Plaza Mortgages in Ontario and Shopping Center Investment
In the three-month period ending July 2019, the Canadian store merchandise retail market grew by 2.1%. Food and drug sales were up 1.5% after growing 3.5% in the previous quarter. Personal care store sales grew by 2.8% year over year, further reinforcing the fact that now is a great time to invest in retail.
There are many ways you could go about this, but few are as compelling as real estate. With a shopping center investment, you could leverage growth in the retail market with a reliable revenue stream from tenants.
If you are considering shopping center investment, plaza mortgages in Ontario can help you to reach your goal. Here’s what you need to know about mortgages, and what you should consider before you invest.
Identify the Risks
As promising as the retail and shopping center markets are today, there are always risks to any investment. Identifying these risks will help you to make better business decisions.
Before settling on a location and exploring plaza mortgages in Ontario, make sure that you are financially able to sustain some losses on your investment in the early years of operation. Very few businesses turn a profit immediately and consistently. In addition to retail trends, you’ll need to consider real estate market trends, the general health of the economy, and the forecast for the global economy.
Learn the Shopping Center Market
Any time you invest, you need to perform market research. Network with plaza operators in Ontario to discover trends and headwinds that currently exist in the market. Learn about the relationship between location, condition of the property, and customer volume.
You’ll also need to learn about the demographics in the area you choose to invest in. Some plaza investments are simply not located in the right spot. This can lead to slow foot traffic, low sales, and high tenant turnover.
You should also consider the other establishments that are available in the area where you choose to invest. Will you face heightened competition from shopping plazas and malls?
Find a Real Estate Deal with Potential
If you understand the risks, economic factors, and the shopping center market, you can start to explore your real estate options. Plaza mortgages in Ontario can be used for a range of shopping centers of all sizes.
There are three factors that can make a plaza a winner:
- Ideal demographic to tenant match: If the tenants at the shopping center appeal to the local demographic, you’ll be in the best position to sustain your investment.
- Occupancy rate: Ask the seller or estate agent about occupancy rates. Look for a floating rate that is higher than 80%. Low occupancy can make a shopping center unappealing to the general public. Always ask for documentation to back up the claims of the seller.
- Lease terms: Ideally, you should seek to have a majority of tenants on leases that have three or more remaining years. This will provide security for the near future.
Cost also matters. Research the local commercial market and make sure that your investment is in line with current median values.
Check Your Options for Plaza Mortgages in Ontario
If everything checks out, you can start shopping for a loan. You could do this privately through lenders, but you’ll find the process to be time-consuming and at many times frustrating. Large lenders rarely post rates online. There’s often a lot of back and forth before you even discover the mortgage packages that are available.
A mortgage broker can alleviate this problem by acting on your behalf to find Plaza mortgages in Ontario. With a broker, you leverage their experience for a smoother application process. Your broker will also identify the packages that have the lowest rates and most favourable terms.
Plaza investment can be a great way to secure your financial future and increase your net worth. A broker will make the mortgage process simpler so that you can close a deal and take ownership of your new venture.
To book an appointment to discuss your needs and learn more about how Mortgage Capital Investment can help you, call 416-877-7438 or