Amid the uncertainty of lockdowns and other public health restrictions which have challenged the economy, commercial property has remained a reliably stable investment across Australia. In the 12 months leading up to July, income return rates averaged 5%. Over the past decade, commercial property has resulted in a per annum income of 6.2% annualised and a total return of 9.4% annualised, according to the financial reporting site Livewire.
If you've chosen to invest in commercial property and are considering a sale so as to realise the gain in value of your property, an auction may be the best choice to maximise the return on your investment. Here is a look at why you might decide to sell under the hammer in the near future — and what you can expect when you make such a choice.
Local research: price guides
Each state has different restrictions governing auctions, so it's essential to gain an understanding of these early in the process.
In Queensland, for example, price guides aren't permitted. All listings must be displayed with a disclaimer stating that any visible price guidance is irrelevant to the property itself.
This puts the burden on sellers to do their own research, comparing your property to similar other properties nearby. Knowing that this will happen should put the onus on you to make sure your property will fare well on the market. The goal of the auction, after all, is to obtain the best possible price for your property — as determined by the open market.
Local research: vendor bids
Vendors in Queensland are not required to set a reserve price when putting a property up for auction. It's possible to set a reserve price, but it must be codified in writing well ahead of the auction. It must be possible for all prospective buyers to gain an understanding of the expectations.
When there is no reserve price published, the property will simply be sold to the highest bidder on the day of the auction. And while the auction is underway, vendors representing buyers may make unlimited bids.
In order to attract potential bidders, you'll want to make sure your property is both ready to be critically viewed by prospective buyers and to have a good marketing strategy to generate plenty of foot traffic on auction day.
Once your space has been brought into prime condition, it's time to take some photos and start marketing. The more prospective buyers who are aware that your property is for sale, the more success you'll have come auction day.
Whenever and however you elect to sell commercial real estate, it's essential to seek the advice and assistance of a knowledgeable seller's agent. There are many experienced professionals at Ray White Surfers Paradise who can assist you throughout the process so as to maximise your sales price in the most efficient way. Contact us today to discuss how we can set you up for success from the get-go.