Investing in Commercial property is not “rocket science”.
Nonetheless, there are certain key steps you do need to follow. And those involve you in making a number of simple (yet vital) decisions.
DECISION #1: Your Goals for the long and short term?
In other words, are you seeking Income on Capital growth — or both? Maybe you are after some good Tax savings — through negative gearing or Depreciation?
DECISION #2: The Sleep Test!
You need to establish your comfort level as far as the amount you will borrow. For some people 80% is fine; for others, 50% is all they can live with. So you need to determine your “Threshold of Insomnia”.
DECISION #3: Your overall Portfolio mix.
Do you intend to focus on just one sector in the Commercial Property Market — like Retail? Or do you prefer a spread across the Office and Industrial sectors as well? Having some diversity will help you smooth out any ups and downs that may occur along the way.
DECISION #4 Go it Alone … or join with others.
Not many people starting out are able to jump straight into the market, and buy a Commercial property for $1 million+. Therefore, you can step above the competition by joining with another 12 to 15 like-minded investors, in a Private Syndicate — to buy something in the $2 to $5 million range — where you obtain better value for your money.
DECISION #5: Choosing your team of Consultants.
As you’ll appreciate, simply being able to move quickly can snare you some of the best deals. Therefore, you need to have a trusted team of Consultants ready to help you with … assessing Value; putting the Deal together; reviewing the Contracts; arranging Finance; undertaking the Due Diligence and so on.
Bottom Line: All you need to do is quickly grasp the various ins and outs of Commercial Property — so that you, too, can start reaping the enormous rewards available.
