Commercial Real Estate Agents, Broker, Commercial REALTORS®

At the time of recession is when real estate investment properties are tested. We find the commercial real estate properties with highest amount of tenants do better to recover at or after recession. Also depends on property that you own, is it under commercial rules or residential tenancy act. 

Why we specialize and believe that self storage facilities are one of the best commercial investment properties is due to commercial tenant rules, low maintenance, low overhead, rents can be increased based on market demand, tenants stay on average 1 + years, if tenants don't pay you can sell of the contents of the unit to recover lost rent revenue, land banking. 

Moreover, if you have a 4 tenants and 2 leave or can't afford to pay rent your investment property might suffer financial loss, as for self storages you might have 200+ tenants and if 20% leave or don't pay rent your property will still do well financially. This is why most commercial investors prefer more "doors" as it reflects less risk. This is why Self Storage Facilities are one of the best commercial investments properties you can own. Contact us for more details.

Our response is based on what we experienced with buyers/self storage investor. Banks will change their loan strategy from year to year and some banks might take more risk this year vs another year. However you can expect loan to value ration to be in range of 30/70 - 45/55 for a self storage facility. This is slowly changing as banks are also realizing that self storage facilities might be a safer bet vs other real estate properties.

In Ontario we find there are several factors when it comes to lending and loan to value as per banks;

1. Previous Experience with self storage facilities

2. What relationship you as investor have with Banks and of-course good credit history. 

3. Location of self storage Facility, closer to city with more population easier to approver and less risk.

4. Assessment value of the self storage property. 

5. Cap Rate you purchased facility at.

6. Last 3-4 years of financials, so that Banks can see if investment property is improving financially.

If you have more questions please feel free to contact us. info@invsty.com

We are not financial advisors and this is just our personal opinion. The last two years have put so much pressure on renters and investor especially in residential real estate investment properties. 

Investors are switching or adjusting their portfolios from Multifamily Investment properties to more industrial commercial real estate like self storage facilities. Investing in commercial real estate like self storage facilities should be your first choice for investment property as it is more recession resilient, commercial tenancy rules vs residential tenancy, more wealth and appreciation can be generated from commercial real estate investment properties. Keep in mind that some residential properties sell for $1-2 million in Ontario and for the same amount you can buy commercial investment property. 

If you would like to get more information or have questions please contact us.