How to Choose the Best Tenant for Your Investment Property

escalators inside shopping centre

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 results.

A solicitor prepared lease offers alternatives in income generation from things such as:

  1. Rent review timing
  2. Type of rent
  3. Base rent at lease commencement
  4. Method of rent review
  5. Recovery of outgoings during the lease
  6. Option for further lease terms
  7. Renovation strategies for tenant compliance
  8. 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.

Why Lease Enhancement is Important in Commercial Real Estate in Brisbane

shopping mall and retail shops

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.

brisbane buildings on river
Brisbane Real Estate is very active

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.

How to Choose the Best Real Estate Agent for Your Property Sale

city buildings on skyline

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.

city at night
Understand your property and the local area of buildings.

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.

Agent Questions

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 property promotion.

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.

How to Promote Your Commercial Property for Sale

city buildings on skyline

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.

city buildings
Every property market is different, so ask questions.

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.

Getting the Right Price for Your Investment Property

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.  The end price for a 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.

Real estate agents offer 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; 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.

What to Look For in Commercial and Retail Leases

shopping centre mall foyer

Property owners that lease commercial property to tenants should keep a close eye on the terms and conditions of their leases.  It is all too common that a critical date or situation is overlooked in a lease and the landlord or property manager has to chase down and remedy the matter. 

The key secret to keeping a commercial property on track is in understanding the leases and thoroughly actioning any date critical terms and conditions.

city building high rise
Look at Your Investment Property Comprehensively

There are many things to look for but here are some of the main ones to monitor:

  1. Rent review dates
  2. Option to renew dates
  3. Lease expiry dates
  4. Renovation date requirements
  5. Insurance certificate of currency evidence
  6. Charges for outgoings
  7. Reconciliation of outgoings
  8. Payments of sundry charges under the lease
  9. Rent payment provisions
  10. Turnover reporting to the landlord
  11. First right of refusal provisions

The list can go on, but importantly the critical dates in a lease are handled and controlled.  In this way the property can be optimised for the landlord and the tenant.

When it comes to marketing and selling your property, the time you spend on tracking and checking critical dates is invaluable in the long term.

Contact Systems for Commercial Real Estate Tenants

tops of city buildings

When you own a commercial or retail property, it pays to keep in close contact with your tenants.  They are a key part of the property performance and should be nurtured to stabilise income from the property.

As part of keeping in contact with the tenants in your property, you can create a tenant contact plan that formalises the meeting and any feedback that may happen as a direct result.  Many larger landlords in high performing properties will create and hold tenant contact meetings with all tenants at least every 90 days.  In retail property this cycle is shorter given that a retail property is a very active type of property investment.

So just what can and should you talk to your tenants about?  Try this list:

  • Need to expand premises
  • Need to contract premises
  • Maintenance needs in the property
  • Interaction with other tenants in the same building
  • Exercise of lease option
  • Use of the building
  • End of lease issues
  • Renovation or refurbishment plans
  • Insurance
  • Terms and conditions of their lease and compliance to that

It is interesting to note that good tenants are constantly being networked by other property owners and real estate agents in your local area.  All the more reason to keep in contact with your own tenants to make sure they are happy in occupancy.