One of the most important aspects in running a business is to constantly embrace change. From consumer or client behaviors, wants and needs to vendor or supplier management, staying on top of changes that affect your business is critical.
Anthony Ryan, Senior Vice President, Director of Retail Lending Strategy and Operations, WSFS Bank
However, a key constant that must be embraced is reinvesting in the business. There are several ways to put resources back into a business, but one option that should not be overlooked is real estate.
Purchasing real estate can fortify your business in many ways, from providing a permanent home to becoming an everyday revenue generator.
Here are a few ways reinvesting in your business through real estate can increase profitability and strengthen your finances.
Establishes Cost Certainty By purchasing property for your business, you can control costs better by not having to deal with rising lease costs. Purchasing your own property with a commercial real estate loan for small business, for example, provides cost certainty with fixed terms, rates and fees including appraisal and most closing costs and bank costs.
Also called an owner-occupied commercial real estate loan, this lending option helps secure financing for the acquisition of a building, the refinancing of an existing commercial property, or for making improvements to your existing property.
Generates Revenue Owning your business’ property can also reap revenue-generating benefits, such as leasing part of the space to another business or if it includes mixed use space, having a residential tenant. Both options can provide consistent revenue that can be reinvested into your business, help pay for the mortgage, and more.
Just make sure your business uses at least 51% of the space.
Already Own the Property? Reinvest Through Refinancing If you already own your business’ home, refinancing your loan can be a great way to put cash back into your pipeline. Whether you use the savings to build reserves or use a cash out refinance to expand the business or renovate your space, looking for ways to make your business’ finances work for you is always a good idea.
Extra Perks Much like residential real estate, commercial real estate has extra incentives for property owners, such as building equity. If your business’ property gains value over time as you are paying down the mortgage, that equity can be used in several ways to increase the financial strength of your business.
Owning the property also adds long term value to your business, which can also help if you reach a point where you are weighing whether it is time to grow or sell.
Finally, if your property is financed you may be able to deduct the annual interest paid on the loan and other expenses associated with owning the property, an excellent advantage over leasing space.
About the Author – Anthony Ryan Anthony Ryan is Senior Vice President, Director of Retail Lending Strategy and Operations for WSFS Bank. He previously served as Senior Vice President, Director of Small Business Lending. Anthony joined WSFS in 2011, bringing with him over 30 years of Retail and Small Business Banking experience.
OTTAWA – The Canadian Real Estate Association says the number of homes sold in August fell compared with a year ago as the market remained largely stuck in a holding pattern despite borrowing costs beginning to come down.
The association says the number of homes sold in August fell 2.1 per cent compared with the same month last year.
On a seasonally adjusted month-over-month basis, national home sales edged up 1.3 per cent from July.
CREA senior economist Shaun Cathcart says that with forecasts of lower interest rates throughout the rest of this year and into 2025, “it makes sense that prospective buyers might continue to hold off for improved affordability, especially since prices are still well behaved in most of the country.”
The national average sale price for August amounted to $649,100, a 0.1 per cent increase compared with a year earlier.
The number of newly listed properties was up 1.1 per cent month-over-month.
This report by The Canadian Press was first published Sept. 16, 2024.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
MONTREAL – The Quebec Professional Association of Real Estate Brokers says Montreal-area home sales rose 9.3 per cent in August compared with the same month last year, with levels slightly higher than the historical average for this time of year.
The association says home sales in the region totalled 2,991 for the month, up from 2,737 in August 2023.
The median price for all housing types was up year-over-year, led by a six per cent increase for the price of a plex at $763,000 last month.
The median price for a single-family home rose 5.2 per cent to $590,000 and the median price for a condominium rose 4.4 per cent to $407,100.
QPAREB market analysis director Charles Brant says the strength of the Montreal resale market contrasts with declines in many other Canadian cities struggling with higher levels of household debt, lower savings and diminishing purchasing power.
Active listings for August jumped 18 per cent compared with a year earlier to 17,200, while new listings rose 1.7 per cent to 4,840.
This report by The Canadian Press was first published Sept. 6, 2024.
