A lot of people like the concept of investing in real estate but are hesitant when they see the word "commercial" since it's not a familiar term. People have lived in a home, an apartment building, a condo, so its easy to relate to that type of investment since "it is close to home."

Commercial properties can be quite lucrative and even less involved as an owner. A Triple Net Lease typically means that the tenant will pay their rent (the rent amount based on the square footage of space within a large space and even the entire property) as well as an additional rent. Commonly referred to as TMI (Tax, Maintenance and Insurance).

What makes this attractive for an owner is that you typically know exactly how much NET OPERATING INCOME (NOI) you will have each and every year. The tenants are responsible for all costs associated with operating the property.

Additionally, one of the most coveted type of lease structure is a "HEAD LEASE." A head lease can be when a major corporation leases an entire property and perhaps sub-leases some or all of it out.

Personally, I work with a large corporate client that will head lease a property based on the following structure and on a triple net basis. For example, some of the terms of the lease would include:

• The tenant shall be responsible for all repair and maintenance of the property including, but not limited to snow removal, utilities, mechanical equipment and non-structural deficiencies during the term of the lease. The Landland shall be responsible for all major structural deficiencies as outlined in Schedule "__" of this Agreement to Lease.
• The tenant shall pay a base annual rent of $__________ to the landlord with all operational and maintenance expenses to be the responsibility of the tenant.  
• Etc.

This tenant typically signs a lease that would match the duration of a commercial mortgage amortisation period (20 Years) with two options to renew being 5-years each.

The benefits of this, outside the obvious, is that in addition to you basically having a lease that runs the duration of your mortgage; lenders view these types of tenants typically as low-risk.

Purchasing a commercial property could in fact require a lot less "hands-on" time from the owner/investor. With residential tenants; you have a lot of potential "hands-on" time such as qualifying new tenants when tenants leave, dealing with problematic tenants and the Landlord Tenant Board.

These options are often overlooked since majority of the entry-level priced options are not in the GTA (Greater Toronto Area) and are typically 3-4 hours away from Toronto. With that said; as the owner, you may not need to "babysit" the property with as many frequent visits that you may have with residential investment options.

Some opportunities can start in the low $3,000,000 range and offered around a 6% Cap Rate when you look a few hours outside of Toronto.

Some of these types of investment opportunities include brand new construction Gas Stations with Food Partners (for example: ESSO and Tim Hortons or ESSO and Pizza Pizza). You as an investor would own the land and the improvements (the station and equipment) but lease it in it's entirety to one tenant that has employees or sub-tenants operating and running it.