Should You Invest in Commercial Property? Feb 21st
Investing in commercial property can be a great way to earn a six-figure income. This is due to two reasons.
First, the real estate market in Australia is booming. If you invest in a property today, you can expect to make good returns 10 or 20 years from now when the value of your property has very likely doubled.
Second, many new businesses have set up in the last year while existing businesses are looking to expand their company operations. All these businesses need good commercial properties to set up their offices or stores.
However, not every opportunity for investment in a commercial property may end up in profit. If you have been thinking about investing in the Australian real estate market, you should ask yourself 4 questions before making a decision to commit.
Is It a Good Location?
Location is the most important thing you should consider in a potential investment. Most businesses looking to set up a store or office look for a busy street with good access to transport and services.
You would never want to purchase a property in a far off suburban area, even if the price is dirt cheap. If the location is not suitable for commercial activity you won’t be able to achieve your goal.
If you are looking to rent the place out for business eventually, you would not want to invest in a residential zoning. Make sure to find out about restriction and limits in the use of property before you buy.
How Much Will the Property Cost?
You could be looking to buy low and sell high instead of renting the place out. The trick to remember here is that you don’t make your profits when you are selling the place. You make your profits when you buy it.
Before committing to investing, do your market research thoroughly to find out the prices in the area. Having an experienced broker on your side, like Stamford Capital Australia, can really make a difference in getting a good bargain.
If you don’t do the required research and pay more than the property is worth in the market, you may have to wait for a longer time before you can get the required return on your investment. This can tie up your fund and you may end up losing a better deal elsewhere.
What are the Market Expectations?
Properties in under developed areas are cheaper to purchase. However if the market does not develop into a commercial hub you may not find any businesses looking to rent your premises.
With established commercial area, the purchase price might be too high. This means expensive mortgage payments which will eat into your bottom line.
The ideal would be to invest in a developing area that is expected to pick up in two to five years where you can be sure to get businesses lining up to rent your property.
What is My Exit Strategy?
You should know how to land a plane before you take off. The same is true of real estate investment.
You should have clear goals on what you want to achieve from your investment and what to do in case you need to access your funds.
Real estate investment for commercial purposes is a long-term prospect. You should set a target of at least five years before you are ready to sell. Once you are ready to sell, you should consider all of your options and find the best solution for you. For some, the 1031 dst properties Georgia has on offer are a great stepping stone investment, leading to higher returns, but it truly depends on your current situation.
Consider all your options before buying, especially if you are financially strained and think you may end up having to sell earlier. One thing you would not want is to sell at a loss.
Commercial real estate investment is a lucrative industry. If you do your research, have financial stability and make a sound exit strategy, you can make a really good income out of it.
Feb 21st
Investing in commercial property can be a great way to earn a six-figure income. This is due to two reasons.
First, the real estate market in Australia is booming. If you invest in a property today, you can expect to make good returns 10 or 20 years from now when the value of your property has very likely doubled.
Second, many new businesses have set up in the last year while existing businesses are looking to expand their company operations. All these businesses need good commercial properties to set up their offices or stores.
However, not every opportunity for investment in a commercial property may end up in profit. If you have been thinking about investing in the Australian real estate market, you should ask yourself 4 questions before making a decision to commit.
Is It a Good Location?
Location is the most important thing you should consider in a potential investment. Most businesses looking to set up a store or office look for a busy street with good access to transport and services.
You would never want to purchase a property in a far off suburban area, even if the price is dirt cheap. If the location is not suitable for commercial activity you won’t be able to achieve your goal.
If you are looking to rent the place out for business eventually, you would not want to invest in a residential zoning. Make sure to find out about restriction and limits in the use of property before you buy.
How Much Will the Property Cost?
You could be looking to buy low and sell high instead of renting the place out. The trick to remember here is that you don’t make your profits when you are selling the place. You make your profits when you buy it.
Before committing to investing, do your market research thoroughly to find out the prices in the area. Having an experienced broker on your side, like Stamford Capital Australia, can really make a difference in getting a good bargain.
If you don’t do the required research and pay more than the property is worth in the market, you may have to wait for a longer time before you can get the required return on your investment. This can tie up your fund and you may end up losing a better deal elsewhere.
What are the Market Expectations?
Properties in under developed areas are cheaper to purchase. However if the market does not develop into a commercial hub you may not find any businesses looking to rent your premises.
With established commercial area, the purchase price might be too high. This means expensive mortgage payments which will eat into your bottom line.
The ideal would be to invest in a developing area that is expected to pick up in two to five years where you can be sure to get businesses lining up to rent your property.
What is My Exit Strategy?
You should know how to land a plane before you take off. The same is true of real estate investment.
You should have clear goals on what you want to achieve from your investment and what to do in case you need to access your funds.
Real estate investment for commercial purposes is a long-term prospect. You should set a target of at least five years before you are ready to sell. Once you are ready to sell, you should consider all of your options and find the best solution for you. For some, the 1031 dst properties Georgia has on offer are a great stepping stone investment, leading to higher returns, but it truly depends on your current situation.
Consider all your options before buying, especially if you are financially strained and think you may end up having to sell earlier. One thing you would not want is to sell at a loss.
Commercial real estate investment is a lucrative industry. If you do your research, have financial stability and make a sound exit strategy, you can make a really good income out of it.
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