When you own commercial or retail property in Queensland,
the income you get from your tenants is critical to the result you want as an
investor. For that reason, every lease
and its income profile should be optimised to the market and what is possible
given local vacancy trends, supply and demand, and property enquiry. Tenant selection will also be part of that.
Every tenant should be chosen with due regard to income growth and stability. Are they a clear match for your property? It is the case that some tenants are better than others. Grow your tenant mix in your property through selectivity over time.
Brisbane is part of the eastern seaboard of Australia and is a key point of entry for goods and containers. That is unlikely to change given the proximity of Brisbane to Asia and the Pacific. The real estate in Brisbane is cheaper than Sydney or Melbourne, and on that basis freight businesses and logistics firms can build a base of operations more economically than that in the other capital cities further south.
Where Do You Start Investing?
So what can you do if you are to be investing in Brisbane property? To help your income grow, it is wise to speak to your solicitor and your leasing or managing agent about a lease and rent review strategy that can work for the property and the tenants over the coming years. A good property investment is something that is shaped over time.
Don’t accept some ‘cheap generic lease’ as part of your
property lease strategy. Create a lease
with the help of your solicitor that can build your real estate investment
A solicitor prepared lease offers alternatives in income
generation from things such as:
Rent review timing
Type of rent
Base rent at lease commencement
Method of rent review
Recovery of outgoings during the lease
Option for further lease terms
Renovation strategies for tenant compliance
Make good terms and conditions at the end of lease
These alternatives when considered and placed into a property investment allow the property owner to go to the next level. Using the advice of your property solicitor and the comments of an experienced real estate agent will help the property planning process. A good property income and performance does not happen as a result of luck; it is a planned event.
Need help with investment property in Brisbane? You can contact John Highman direct on 0417221108.
Investors in Brisbane today have a wide variety of options
when it comes to leases and how they will serve the property in an investment
sense. Importantly the lease that an
investor uses should be drafted by a solicitor of sound commercial property
experience. Brisbane is a thriving and
growing capital city on the eastern seaboard of Australia. Investments in property are a good thing.
It should be said that a lease of commercial or retail property is not just about the rent; it’s about occupancy, security, investment, improvement, and stability. When you have a tenant, then the lease takes over in the control sense to cover off on these issues.
Nothing is more troubling than a lease that has been drafted by someone with little local property knowledge and experience. The reality is a lease should be structured for the property, for the future, and for the location. Not all properties are the same and on that basis, no lease should be the same. Not all investors are the same from an investment perspective. This is where the variables of property use and occupancy become important, and the lease then takes over in the control sense.
A good property solicitor that is acting for a property investor should take into account not just the priorities of the client, but also the elements of the property that need special attention and control over time. From that point, they can structure a lease that really targets the issues for the property owner.
When it comes to selling your commercial or retail property, the buyers that you need are the ones that can act in today’s market and economy. To find the right buyers and bring them to your sale is a skill that only the best real estate agents can provide.
The Local Property Economy
Those agents know what the local economy and businesses are doing; it is that information that is valuable to you with your property challenge. Choose your agents with a questioning approach regards market awareness, property type coverage, and target market penetration.
So what is actually happening with investment properties in Brisbane now? There are still buyers out there that are looking for good investment property stock; that is something with a tenant mix, stability of cash flow, and future demand. Are you taking your property to the market soon in Brisbane?
Consider the facts and challenges around your property and what it is worth. If you were buying it today, what would you pay? Would you pay a ‘premium’ or would you look for a ‘bargain’. It sometimes pays to ask yourself those questions and put some reality into the real value that your property presents to any purchaser.
Let’s go back to the ‘agent question’. One of the most important elements of property
marketing today that an agent can bring to a seller is direct access to a
comprehensive database of qualified prospects.
That database list alone will help you fast track inspections, enquiry,
and the right type of property offers even in the earliest stages of the
Ask your agent if they have a database and a target market
to suit your real estate challenge. Ask
them how they are going to tap into it to help you with your property requirements
and investment outcomes.
Marketing and selling commercial investment property today changes by location, by property type, and by the time of year. When you decide to sell your investment property in Brisbane it pays to ask your commercial real estate agent to give you a market profile update and target market assessment. In that way, you will know exactly what can happen when you take the property to the market.
Think about these questions:
Who are the right buyers for the property?
What are they prepared to pay?
Why should they buy your property?
When is the best time to promote your property?
All properties are different as is the enquiry that you can achieve at a particular time. So, questions like these help you focus on the things that matter. You can find out about the local property market, the recent enquiry, the price and rent outcomes, and the likelihood of moving the property quickly at a reasonable financial result.
On that basis, marketing should be individually designed for the property and the existing market circumstances. Here are some key points to consider in selling your investment property:
Growth of local and regional businesses
What buyers are looking for today
When the best time to sell the property may be
Local supply and demand for space to occupy
Price trends over the last 2 years and the impact on investments
Rent trends over the last 2 years and the ongoing renal patterns of gross and net rent
Location of comparable properties in the area with which you compete.
So all of these questions help you stay on track with your property promotion. Plan how you want to sell a commercial property, and just who the local agents should be to do that with great effectiveness.
Managing commercial or retail property is not just a matter of collecting rent and fixing a broken toilet. Today there are so many other pressures and issues that come into the process. That is why property managers should be well skilled and experienced in the tasks of property management.
When you sell a commercial investment property, the price you achieve is driven by the market. It is the buyers in the market that generate the interest and ultimately make the offer.
Contrary to popular belief it is not the sellers or the real estate agents that set the final price. What the sellers want for their property and what the agents think they can get are in reality an educated guess or wish based on market trends and sometimes other pricing evidence. In saying that, the end price for any commercial property is driven by the buyers in all cases.
If a sale goes ahead it is because the buyers are willing to pay the money; sure the seller has to accept that price, but without a buyer making the offer, the price for a property is just a number. At times the real estate market can be ‘saturated’ with overpriced properties. Time on the market is a big factor in any property sale. If you are ready to sell your property, then consider a ‘fair’ price, but not an ‘excessive’ one.
Real estate agents offer their clients real benefit to the sale process because they are working with buyers and tenants all the time. The database that an agent has is a huge source of opportunity when it comes to selling your property.
The bigger and better the database, the more exposure to qualified buyers your property will have. This massive exposure that some agents have to buyers is of great advantage to you when you want to sell the property.
At the time of putting your property on the market, find the agent with the best and most up to date database of potential buyers; it will be a direct reflection of their market penetration and territory domination. They are the agents that should sell your property and they are the ones that will have an idea of what buyers are willing to pay in the current prevailing economy. Make the right choice and get the best agent to help you sell your property.
In commercial real estate, the yield of the property is commonly referred to by investors. It is a point of reference or standard for the property type and the location.
Property yields in this market vary considerably as property investors focus on different property types and situations. Investors come and go from the Brisbane property market based on the ‘opportunity’ factor. That assessment will be different for many investors as they choose property types and precincts to invest in.
Always use caution when considering yields in this
market. It is notable that many yields
have moved out by up to 1% due to economic pressure and changes. There are still some good properties and
Here are a few of the key points to look at when it comes to
assessing property opportunities.
Strength of income is paramount. Most particularly this will come from the leases on the property. When a lease is well structured it will underpin and strengthen the price for the property. Look at things like rent types, outgoings recoveries, option periods, length of lease and make good provisions.
Tenant and landlord covenants will feature in the lease and put obligations of occupancy performance on both parties. For this reason,the checking of the lease before sale or purchase is high on the agenda for the experienced investors. A good solicitor will help with the process.
Physical aspects of the property and structure should always be checked by experts. In this market, a due diligence process in any property sales and purchase is a wise move. A due diligence condition in a contract could take some days if not weeks to be fully checked and satisfied.
Occupational Health and Safety together with the elements of Essential Services and Mechanical performance on the property should be checked by experts including engineers. Legislation in this regard can impact the property with high costs of remediation or changes to Essential Services. Compliance is critical for the property investor.
Permitted use, Zoning, and Building Occupancy Certificates on the property should be checked and related back to how the property is currently used. What you need to know is if any breaches are existing now.
Survey plans and as-built drawings should be sourced on every property purchase. You will need these critical drawings many times in the future when tenants come and go from the property. They are very expensive to obtain when the go missing.
Location is one of the major factors in the future of the investment property, but do not overlook potential or known changes to the regional demographics and business community. They can impact the rental and future leasing opportunity in the property. You can have the best property, but if it is in a poor location or contracting business community, then the property as an investment will have to be reassessed.
These elements will help you consider future property