Insider Tips to Help You Discover How to Succeed with Commercial Property
Last Friday, I attended the annual Commercial & Industrial Economic Forecast Luncheon.
And Dr Frank Gelber (director of BIS Shrapnel) kindly provided is perspective on the Australian economy and the Melbourne Commercial property market — looking forward for the next 5 to 6 years.
Probably the most pleasing aspect was … that his views will were pretty much in line with what I’ve been telling you here, for the past six months or so … [Read more…]
Last week, you looked at the reasons why lenders view Commercial property in a different league to Residential property, when it comes to finance.
And then, we moved to the various aspects Commercial lenders look at as far as Risk is concerned.
More importantly, just how these aspects will determine whether or not they will actually lend against the actual property you are looking to purchase.
However, what you really want to know is … [Read more…]
Over the past few weeks, you have been reading articles about the various Office markets around Australia.
As such, you would now be aware of how each capital City compares, in relation to its … Vacancy rates … Rental levels … and expected Capital growth.
However, most of that commentary has been focused upon CBD Offices. And as a result, people have been enquiring about just how the Suburban Office markets are also likely to perform, over the next few years.
Clearly, a rent differential exists between the City and Suburban Office markets. And obviously, that rental gap will also vary, as you move around Australia. [Read more…]
Commercial property finance is one of those aspects probably the least understood — and therefore, can lead to some are rather poor decisions by investors.
The most important thing you need to grasp is that there are basically no hard and fast rules about the various factors like … the leverage that is available … costs associated with Commercial loans or … the actual lending criteria most financiers and adopt.
When it comes to Commercial finance, everything has to be viewed in relation to the strength and size of each particular deal. [Read more…]
Wherever you live, you tend to believe (and will happily tell people) that it is undoubtedly the best place to live.
Really, it’s just human nature.
But when it comes to investing your hard-earned dollars into Commercial property … your decisions should be governed by something more than a warm and fuzzy feeling.
For the past four or five years, Victoria has led the nation in economic growth; and it is one of the few enjoying a net growth in migration from other states.
Furthermore, the latest ABS figures now confirm Victoria’s continued growth and job creation — leading all-comers over the past 12 months.
And you’ll also notice most of the various service sectors are currently outstripping the mining sector, as far as employment numbers are concerned. [Read more…]
Last weekend in the Financial Review, Andrew Clark began his article (on page 52) with the words:
“Australians don’t know if they’re in the middle of a pause that refreshes or the dullness before the deluge.”
That about sums up the general feedback I am receiving at the moment, from clients and colleagues alike.
Clark felt this probably stems from a combination of …
Presumably, this was behind the RBA’s decision to keep the cash rate on hold until next month — pending more economic data in the coming weeks.
According to the IMF … in spite of all the recent turmoil, the outlook for global economic growth appears quite rosy moving into the new financial year. [Read more…]
Today, we will be taking a brief look at the Industrial sector.
Investors have already been snaring some quality Industrial properties — as rentals have begun to climb, following a reasonably static period over the past five years.
As you can see from the table, this increase in activity has been reflected in the dominance of Developers bringing new stock onto the market.
Plus, you’ll notice that Private investors have emerged as the major category of buyers for Industrial property. [Read more…]
Australia-wide, Office vacancies are falling.
And Melbourne leads the way at 5.5%; with Perth close behind, at 6.6% — due to the rebound in mining activity.
According to the Property Council of Australia, these vacancy levels will reach 4.9% and 6.1% respectively, by January of next year.
With zero space coming onto the market in Melbourne, landlords will be well-placed to renegotiate far more attractive deals, as leases fall due for renewal.
Whereas, Brisbane’s current vacancy level of 9.2% is expected to blow out to 9.8% — making it very much a tenants’ market, as far as lease negotiations are concerned.
While rents are rising in most capital cities, selling yields are set to fall as well. This double benefit will be reflected in strong capital growth over the next four years.
Bottom Line: Shrewd investors are currently ranking their preferred Commercial sectors as follows …
Now is the time for you to start re-balancing your portfolio — and ride the growth wave through to 2018.
My apologies for not posting any articles for the past week or so … but I sneaked away to Noosa with Jenny for a short break.
Anyway, I’ll make it up to you with two articles for this week.
You’ve been aware of my general concern with the Retail sector over the past few years. And that’s because the fundamentals are out of alignment.
Of all the sectors within the Commercial market, most people feel comfortable with Retail. And that’s only natural — because all your family members are usually going in out of shops, as part of their everyday life.
However, familiarity with something doesn’t always make for good investment decisions.
And yet, investors continue to out-bid one another — quite prepared to accept yields as low as 3% per annum, for some Retail investment properties. [Read more…]
The RBA appears to be performing a rather fine balancing act.
Its Board knows rising inflation is about to emerge. And this is only temporarily masked by a poor March quarter, following the nation’s flooding earlier in the year. [Read more…]
YOU WOULD no doubt be aware of the benefits of “Negative Gearing”. But most investors have a very poor understanding of how much more money Depreciation can actually put back into your pocket.
Even if the Commercial property you plan to purchase might not be brand-new … you are able to “up value” the various components within the building, to reflect their actual current-day value.
By doing that, you are then in a position re-depreciate them, and gain the maximum tax benefit for your bottom-line. [Read more…]
WITH EVERY NEGOTIATION, you always need to be thinking on your feet. And here are several simple Tips to help you do just that.
WHEN YOU EMBARK on your journey as a property investor, it can be overwhelming – with a flood of information and diverse opinions. To help simplify the process, here are five essential tips for new (and seasoned) investors.
IT DOES NOT MATTER whether you’re an investor or an owner-occupier, there are several important factors to consider when purchasing a commercial property to ensure you make the right choice.
In a previous article, I shared a handy App to assist you in shortlisting potential properties. If you haven’t already downloaded it, simply click on the HiReturn Filter over on the right, to install it on your tablet or mobile device.
THERE IS A BELIEF among many experts that a surge in the stock market typically precedes a recovery in the commercial property market by about six months. And the start of this year saw equity markets gaining some momentum.
I HAVE BEEN ASKED countless times about the secrets to a successful negotiation. And I want to share with you the key elements to help make your negotiations effective.
But first, just watch this short video to gain a quick understanding of these three essential elements that form the foundation of every negotiation.
If you’re new to investing, you might be wondering if it’s possible to manage your own commercial property. The short answer is “yes”, but only if you know what you’re doing.
It’s important to note that owning a commercial property comes with certain legal responsibilities, particularly when it comes to compliance with Essential Services requirements under current Building Regulations.
The current trends in the business have made it clear that office landlords have to cater to the needs and preferences of their tenants. Building owners and managers (who understand and meet these demands) will be able to command higher rents and reduce vacancy rates.
To expand on this, here are four key tips to help attract quality tenants.
