The following Steps should provide you with information and helpful tips you need, to help put together a profitable Commercial real estate a portfolio.
Step 1: Gaining the Knowledge you need, quickly.
Read about and study the an overall market, to quickly gain the knowledge you need – in order to ensure you take full advantage of what Commercial real estate has to offer you.
Step 2: Researching the Current Market.
The internet is one of the key tools to help you uncover Commercial real estate opportunities. Within Australia, you should start at www.realcommercial.com.au. There are other portal sites; and most real estate agencies also have their own websites.
Step 3: Selecting the right Property.
In choosing your actual property, you do need to have some strict guidelines. This will vastly simplify your decision-making process, and bring some consistency to your final choice.
Step 4: Analysing your Selection.
Most of my clients use a matrix combining there Investment Objectives and Buying Criteria.
This allows you to rate each of your potential properties in less than a minute. From there, you need to calculate the rate of return on each short-listed property, from a projected cash flow – including every aspect of the investment – using the appropriate software.
Step 5: Arranging your Finance.
In buying Commercial real estate, you have to have your finance in place before putting forward any proposals. You need to talk to an experienced finance broker (and not just your own bank), in order to find the best rates and terms – regardless of your relationship with your current lender.
Step 6: Negotiating the Deal.
It’s important for you to have an understanding of the more common negotiating ploys, which can then be used to your advantage. Clearly, there is no sense in buying a great property – which you’ve just bought the wrong price and on the wrong terms.
Step 7: Managing your Property for Profit.
If you do attempt to manage a Commercial property yourself, you need to develop a good knowledge of things like tenancy law, statutory regulations and building construction.
This is an area with a range of potential penalties for non-compliance … so most active Commercial property investors have their properties professionally managed. And for the peace of mind it provides you, the modest fee involved is totally tax-deductible.
Step 8: Marketing your Property.
When you’re ready to sell your property, it is important to exercise wisdom in selecting the most appropriate agent or consultant to market your property.
This can involve you in some extensive research, before making any final choice. But having the right person representing you, will ensure that you leave nothing on the table when the time comes for you to sell.
By John Benson