If you are a first time commercial property investor, there are various things you need to keep in mind before you plunge into the investment. Commercial properties generally have plenty of advantages. For example, they will offer you higher yields than the residential properties. However, such yield will be based on various other factors such as the infrastructure, new developments in the area as well as rezoning. To help make sense of the market, you need professional property brokerage services such as commercial property Prestons with LJ Hooker offers for commercial space investors.
A commercial space that is in close proximity to an attractive neighborhood such as one with numerous densely populated condos and flats is likely going to fetch a top price and good yields than one that is situated in a more depressed and less populated area.
For most investors, however, commercial spaces always seem like a sure bet. With brokerage services such as commercial property Prestons with LJ Hooker, they could just be. Here are some of the points to keep in mind before you plunge your head into the commercial real estate market:
Know the types of commercial properties available in the market
Before you throw your money into the marketplace, you need to determine the types of commercial properties that you want. For example, are you looking for office buildings or shopping malls? Are you looking for something in the industrial sector such as a warehouse or even a factory floor space? Make sure that the kind of property that you will choose is a healthy investment that can assure you of excellent yields. Healthy property simply means that it has very good potential to be attractive to many clients and is thus likely to be rented with healthy occupancy rates that will assure you of optimal returns.
Look at the tenure
Some properties are generally leasehold while others are freehold. Leasehold commercial properties are likely to be cheaper. However, if you are sure that the rental income from the property is sufficient to cover your mortgages, then you shouldn’t worry too much about the property tenure.
This is one of the factors that should be uppermost on your mind when shopping for commercial properties to purchase. If you are unsure of the best locations that will assure you of the best yields, you can contract the commercial property Prestons with LJ Hooker to help you with the location factors.
What is the projected rental income from the property investment? There are certain pieces of commercial properties that will attract more interest from tenants and can thus assure you of higher rental incomes. Go for those commercial properties that can make you good money.
Make sure that you understand your property tax obligations when you are purchasing a piece of commercial property in Australia. When calculating the rental yield from your commercial properties, make sure that you have factored in the property tax.
Banks can generally finance up to 80% of the purchase price of your property and you can be offered a payback period of up to 20 years. In the first few years, the rental income may not even cover the cost of the mortgage unless you choose a healthy property with good rental yield.
These are some of the tips to keep in mind when planning a major acquisition for commercial real estate. Unless you are highly experienced real estate player in the market, always enlist the services of a broker to help you along in your property purchase process.