When you're thinking about wading into the commercial property investment market, there's a lot you need to know. However, as with any other type of investment, you want to be able to strike the right balance between getting a good deal and a great property. That's often easier said than done, but there are some ways you can find the right commercial property to maximise your return, including taking the following considerations into account:
When a seller says a property "has potential," that can mean a lot of different things. In some cases, they might be trying to put a good face on a property that needs a lot of work, but in others, a fixer-upper in an up-and-coming neighbourhood could represent that just-right balance between price and demand.
Put another way, it will typically be better to buy at a time when something hasn't reached its full potential versus a space that is at or near its all-time peak price.
This consideration is true for just about any real estate investment strategy, but it's especially important when you're trying to find a great deal. If it's a certain kind of commercial property – an industrial building or restaurant space, for instance – you need to consider how much demand there is for such a property in the area versus the other buildings that could also fill such a need.
One of the common things you may hear in looking at various properties is that it has "good bones," which can be a huge boon for a commercial space. If you're already thinking about the kind of tenant you want, you should look for properties that already contain the features that would benefit them. If so, that might save you some extra headaches – and costs – if you need to add them later.
Along similar lines to the facilities themselves, consider whether your commercial space would be laser-focused to one specific kind of tenant – which may limit demand for it – or if it can be easily altered to suit the needs of an entirely different tenant. There's no right or wrong answer to how flexible a space needs to be, but it's certainly something you need to think about as part of your broader approach to commercial property investment.
While you may have to pay a premium for commercial properties that are close to major roads or rail lines, you also need to balance the demand such properties typically garner. After all, if it's easy for employees, customers or both to get to a property, it's much more desirable than those that may be farther out from these easy-to-access buildings.
It's always a good idea to look at the kinds of businesses that already operate around a given property to see what yours will provide. For instance, if there are already three convenience stores on the block, it might not be a good idea to buy a space where you hope a fourth would open. But if you were to add a retail tenant offering something those other stores do not, it might fill a need and find long-term success.
If you're in the market for a perfect commercial property, it helps to have experienced professionals on your side. At Ray White Surfers Paradise, we've closed countless commercial deals and helped our clients take a big step forward in building their portfolios. Get in touch with us today to discuss all the options that may be available to you.