Buying Commercial Property? Make Sure You Choose Wisely

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Real GDPIN ALAN MITHELL’s article last Saturday (AFR: page 15), he discussed a recent report from the OECD — which outlined the growing pressures upon the Australian economy for structural change.

Apparently, the centre of gravity for global activity is gradually moving.

Centre of Gravity is coming closer to AustraliaAnd as the table shows, this is moving closer to Australia; and will bring with it an increase in … specialisation, innovation, productivity and income.

However, as a Commercial property landlord, you will only continue to be successful if you can quickly identify those businesses benefiting most from what’s occurring.

You have already seen a shift in manufactured goods offshore; as well as the car industry unwisely being subsidised by government.

Australia’s future growth will principally come from specialist skills within the Service and Agricultural sectors.

Mining activity will still continue, as demand for raw materials remains in China and India — to complete their massive infrastructure programs.

But the real growth will occur in new businesses emerging, to help meet Asia’s growing food and specialty services needs. And these will quickly become your stable tenants, over the next few decades.

Beware of Buying the Wrong Property

You will have also noticed that most Commercial properties are still being promoted using “push marketing” — with large advertisements and plenty of hype.

Any involvement you may have had with selling agents has always been a transaction based relationship. And invariably, you were “persuaded” to buy the property because of the sales pitch.

But everything changed around 2005, with the advent of social media.

Society began to reject these “push marketing” techniques, and turned in preference to “pull marketing” — where you (as the buyer) are now calling the shots.

What you are now seeking is a relationship based upon trust — where you can obtain all the information YOU require … before deciding whether to purchase.

But sadly, most selling agents do not appear to have made this transition as yet.

Sure, many of them have Facebook and Twitter pages. However, they haven’t quite made the mindset shift needed … for them to offer you the educational marketing approach you require.

Obtain ALL the Necessary Information

Now more than ever, you need to fully assess the latest trends and strategies — given the current global scene.

Therefore, don’t just be satisfied with the traditional sales hype and in-house research you’ve been receiving. Instead, carryout your own research.

Alternatively, gather around you some trusted consultants — who can guide you in the areas of … property selection, the law, construction and finance.

Bottom Line: Clearly, the rules have changed over the past 10 years — both globally, and also in the way you do business here in Australia.

Therefore, you need to undertake the necessary prep-work to ensure the ongoing security and growth of your Commercial properties, from here on.

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