A property purchase is an expensive business which contractors must be vigilant at every stage of the journey. Without proper planning, entrepreneurs may find themselves before a number of problems such as insufficient funding, unexpected construction costs, an inefficient management and prosecutions related to the environment.
"We must be vigilant on all fronts and avoid mistakes that could prove costly in the long run, said Jeff Beacom, vice president and district director at BDC. Take time before choosing a location is a simple matter of common sense. "
Even if the cost of housing has skyrocketed in recent decades, Mr. Beacom says that entrepreneurs still earn to buy a property rather than rent. "You avoid rent increases and your property may appreciate in value," he says. Moreover, a buyer may deduct from taxable income of the business value of the loan, the mortgage interest and depreciation in the value of the building - something impossible for leasing.
What makes a successful acquisition? Mr. Beacom cites five key points that need special attention.
Understand the local real estate market
Before making the important decision to purchase a particular property, contractors should consider the location. Each local market has hit its own taxes, has its share of land and account specific environmental problems. We must also take into consideration the availability of skilled labor in the region. Municipalities can often provide useful information on upcoming industrial projects and environmental issues.
Tidy in its funding
Affordability is an important issue in commercial real estate today. Before you go to a bank, you should consult an accountant to determine your budget. The bankers will seek quality financial statements and will want proof that the profits remain well within the company. All these factors play a major role in obtaining the loan you want.
It should also consider alternatives to conventional banks. A bank may well agree to fund 65% of capital required, but ask you to invest the balance of 35% - a heavy burden in the case of personal property of one million dollars. BDC ** Funding for acquisition of land or building more flexible terms than banks, according to the client's situation. It also provides funding to meet multiple needs, including land acquisition and interim financing.
Whatever option you choose, resist the temptation to curry favor with credit institutions by presenting overly optimistic. Repayment problems can further reduce your costs and increase your flexibility.
Consult tax
The tax implications of property transactions can be complex. "My advice to first consult an experienced accountant," says Beacom. Entrepreneurs must know, for example, if the purchase should be considered a personal property transaction or business. Other issues to be addressed include the planning transitionet Funding decisions on the distribution of assets on sale.
Carefully plan your landscaping
Whether an existing building or renovating, you'll need its installation gives you a competitive advantage. Good management can reduce operating costs while improving your ability to produce new products and ability to produce goods of better quality. The development of a plant has a major impact on operational efficiency optimization processes and reduce waste. Even if entrepreneurs are reluctant to spend more to equip the rooms after a costly purchase, they typically find quickly the benefits of such an additional investment. "What you spend on the development and production planning can be recovered by productivity gains," says Beacom. BDC offers entrepreneurs financing to help them improve their operational efficiency, and consulting services to enable them to eliminate waste and streamline their processes.
Choose the right contractor
"Less time, less money and more value. These principles should guide you in choosing a construction contractor, "suggests Mr. Beacom. "You should look for quality contractors who are reputable and that can meet your needs. Among the essential characteristics of a good contractor, include the experience, timeliness and good knowledge of your industry. For example, if your building must meet the standards of the food business, your contractor must have expertise in this area. We must also look at the financial history of the manufacturer. "You do not want to find yourself in a situation where a contractor uses your deposit to finance a deficit earlier contract," he adds. If in doubt, perform a credit check.
"Ultimately, there is no magic formula for successful acquisition of a building or land. However, if you pay attention to the five points above, you'll most likely get the most from your investment, "says Beacon.
"We must be vigilant on all fronts and avoid mistakes that could prove costly in the long run, said Jeff Beacom, vice president and district director at BDC. Take time before choosing a location is a simple matter of common sense. "
Even if the cost of housing has skyrocketed in recent decades, Mr. Beacom says that entrepreneurs still earn to buy a property rather than rent. "You avoid rent increases and your property may appreciate in value," he says. Moreover, a buyer may deduct from taxable income of the business value of the loan, the mortgage interest and depreciation in the value of the building - something impossible for leasing.
What makes a successful acquisition? Mr. Beacom cites five key points that need special attention.
Understand the local real estate market
Before making the important decision to purchase a particular property, contractors should consider the location. Each local market has hit its own taxes, has its share of land and account specific environmental problems. We must also take into consideration the availability of skilled labor in the region. Municipalities can often provide useful information on upcoming industrial projects and environmental issues.
Tidy in its funding
Affordability is an important issue in commercial real estate today. Before you go to a bank, you should consult an accountant to determine your budget. The bankers will seek quality financial statements and will want proof that the profits remain well within the company. All these factors play a major role in obtaining the loan you want.
It should also consider alternatives to conventional banks. A bank may well agree to fund 65% of capital required, but ask you to invest the balance of 35% - a heavy burden in the case of personal property of one million dollars. BDC ** Funding for acquisition of land or building more flexible terms than banks, according to the client's situation. It also provides funding to meet multiple needs, including land acquisition and interim financing.
Whatever option you choose, resist the temptation to curry favor with credit institutions by presenting overly optimistic. Repayment problems can further reduce your costs and increase your flexibility.
Consult tax
The tax implications of property transactions can be complex. "My advice to first consult an experienced accountant," says Beacom. Entrepreneurs must know, for example, if the purchase should be considered a personal property transaction or business. Other issues to be addressed include the planning transitionet Funding decisions on the distribution of assets on sale.
Carefully plan your landscaping
Whether an existing building or renovating, you'll need its installation gives you a competitive advantage. Good management can reduce operating costs while improving your ability to produce new products and ability to produce goods of better quality. The development of a plant has a major impact on operational efficiency optimization processes and reduce waste. Even if entrepreneurs are reluctant to spend more to equip the rooms after a costly purchase, they typically find quickly the benefits of such an additional investment. "What you spend on the development and production planning can be recovered by productivity gains," says Beacom. BDC offers entrepreneurs financing to help them improve their operational efficiency, and consulting services to enable them to eliminate waste and streamline their processes.
Choose the right contractor
"Less time, less money and more value. These principles should guide you in choosing a construction contractor, "suggests Mr. Beacom. "You should look for quality contractors who are reputable and that can meet your needs. Among the essential characteristics of a good contractor, include the experience, timeliness and good knowledge of your industry. For example, if your building must meet the standards of the food business, your contractor must have expertise in this area. We must also look at the financial history of the manufacturer. "You do not want to find yourself in a situation where a contractor uses your deposit to finance a deficit earlier contract," he adds. If in doubt, perform a credit check.
"Ultimately, there is no magic formula for successful acquisition of a building or land. However, if you pay attention to the five points above, you'll most likely get the most from your investment, "says Beacon.
Source : http://www.bdc.ca/fr/centre_conseils/articles/Page/perspectives_bdc_5_conseils_pour_reussir_une_acquisition_immobiliere.aspx
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