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How soon do I get return on investment with commercial property?

By Greg Bell

A large number of commercial properties are purchased for the express purpose of renting the space out to other businesses, and in these cases, it's vital for owners to make sure they are getting a solid return on their investment. When this happens, there's more financial flexibility and owners don't have to worry about dealing with loan payments on an ongoing basis.

With that in mind, you may be wondering how quickly after your next commercial real estate purchase you will be able to realise that return on your initial investment. Obviously there are a lot of moving parts involved here and there's no one-size-fits-all answer anyone can give you. However, there are ways to boost your ROI and get more out of the property.

The biggest hurdle

As alluded to above, the biggest concern you should have as a property owner is making sure it provides a steady stream of income, and that means doing all in your power to keep vacancy to a minimum. CommercialRealEstate.com.au noted that the more you can do to make your property versatile (meaning that it's appealing to more types of businesses) and ensure you are a good partner to any business that moves in, the better off you and your tenants are likely to be as your rental agreement goes on. While not all vacancies are avoidable, you can certainly be more proactive about minimising them.

Know your needs

The other thing to keep in mind about ROI is that a timeline that would work great for you might not be acceptable to another owner, and you'll have to carefully consider what you want to get out of such a property. If you're looking for a quick cash-out, your strategy for achieving your ROI will be quite a bit different from if you are hoping for long-term steady income, according to Investopedia. As such, you need to plan carefully on this issue and figure out what will work best for you.

If you are thinking about buying a commercial property in the near future and have questions or concerns about the financial implications of such a decision, it's a good idea to talk to an real estate professional who has plenty of experience with these transactions. At Ray White Surfers Paradise, we can walk you through all the ins and outs of the sales process and help you get the complete picture of what the purchase would mean for you. Get in touch with us today to learn more.

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