Property owners: Your guide to buying rental property

Mastering the art of choosing your future commercial property

How can you tell whether the building you’re considering is a gem or a dud?

Look for these signs of proper maintenance:

• Heating system: A recent or well-maintained heating system minimizes the risk of expensive breakdowns
• Roof: A roof in good condition, with no leaks or damage, protects against water infiltration.
• Drainage: Efficient drainage systems prevent water accumulation and potential water damage.

What to start with if you’re not a construction pro? During your visits, pay close attention to the following:

• Quality of materials: Opt for durable and weather-resistant materials.
• Condition of gutters: Are they in good condition and securely fastened? If so, they will prevent water from overflowing.
• Draining systems: Check for effective drainage systems to prevent flooding.
• Doors and windows: If they’re of good quality, they’ll withstand strong winds and storms.

The essential building inspection

Buying a commercial property without a prior inspection is a bit like jumping off a cliff without a parachute. You don’t want to jeopardize such a major investment!

Leave this to a qualified professional. They’ll be able to identify potential problems with the property you’re interested in.

The inspection also helps to uncover defects and damage that could lead to costly insurance claims. It will also spare you from future renovations that may not be covered under your insurance.

Use the inspection report as leverage for negotiations. You could lower the purchase price or request repairs before meeting with your notary.

The importance of a detailed inspection before purchase

A thorough inspection reveals hidden defects that you might not see at first glance.

At this stage, focus on the following points:

• Water seepage: Look for signs of leaks, mould or water damage in the basement, walls and roof.
• Heating systems: Check the condition and efficiency of the heating system to avoid costly breakdowns in the winter.
• Roof: Check the condition of the tiles, shingles and gutters to make sure they’re in good condition and free of leaks.

Another clue: claims history

During the purchasing process, check past insurance claims.

A high claims history may indicate structural problems, persistent environmental hazards or even hidden defects.

Last thing, insure your property

You’ll get the keys to your building soon! But before you do, get the coverage that’s tailored to:

• Your building
• Contents
• Property you rent to your tenants, i.e. appliances

In terms of civil liability, protect yourself against having to pay for damage or accidents that could affect other people in your building.  It could be a visitor, for example, who injures themselves on your icy staircase.

When you request a quote, specify which parts of the property need special coverage: roof, foundation, basement, etc.

What about specified perils?

Specified perils require coverage tailored to the realities of property ownership.

Our basic insurance policy includes coverage against loss of income or rent. So if a loss prevents your tenants from living in their home, your loss of income and any additional costs incurred are covered.

The same goes for the loss or destruction of your key documents and embezzlement committed by a member of your staff. It’s covered so you don’t have to put the brakes on your business!

What your insurer will take into account

Is your future commercial building in an area at greater risk of floods, earthquakes or severe storms? To find out, check with the insurer from whom you’re requesting a quote. The insurer will be able to assess these risks when setting the premium on your commercial insurance.

It will also assess the effects of climate change.

Insurance tailored to your needs

Is your insurance up for renewal soon? Take into account the deductible amount and coverage limits to make sure everything meets your needs.