Why is location important for a commercial real estate investment?
Does Locality Matter for Commercial Real Estate?
Real estate is one of the fastest growing industries in the world today. People are also increasingly investing in commercial real estate due to the potential profits and returns possible.
One of the biggest mistakes made by new investors when performing their first transaction is lack of research. This is only limited to research of the market. New investors often do not realise that one of the most important things to consider when making a commercial real estate investment is the locality of the property.
Find out why the locality of a commercial real estate property is important.
Areas with Disposable Income
If you invest in commercial real estate in a high income area, you are bound to get great return on your investment. Commercial real estate properties are used for a number of reasons. The most common commercial real estate projects include plazas, shopping malls, and office buildings. If investments are made for these projects in areas with high income, you are bound to make the profits you dream of.
One example of a great commercial real estate project in the right neighbourhood is Riverbend Gates Plaza in London, Ontario. Not only is the site for the plaza in one of the fastest growing regions of the city, but the neighbourhood itself has an average annual income per household which is 8 greater than the rest of the city.
Areas with an Increasing Population
A neighbourhood with an increasing population means that people here are finding exactly what they are looking for. A neighbourhood is chosen for a number of reasons including the safety, opportunities for income, and the proximity to famous attractions within the city or region. Investing in commercial real estate in an area with an increasing population is almost always a good idea as this is an indication that a large number of people are interested in the locality or neighbourhood which makes them bound to stay for longer.
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