Set Yourself Up For Commercial Property Success

The Commercial Property Series

You’ve heard about commercial property, you know people who have invested in commercial property, you’ve heard the podcasts and it’s certainly become a buzz word, but why would you purchase commercial property and how do you get started?

FIRST. WHY

• Talk to your accountant.

• Make sure you’re set up with the correct structure for what you want to achieve. This is crucial in order to maximise any purchase or investment in Commercial Property

• Research. Listen to podcasts, read books, joined relevant investment communities and get curious so that you’re asking informed questions to understand the context of answers. Self-educate, educate, educate.

SECOND. HOW

• Understand your lending capacity. Commercial investments are assessed differently from Residential, particularly with a strong tenancy in place.

• Go to your lender direct and also, speak with a commercial finance broker. Don’t shop around too much beyond this - it leads to confusion and analysis paralysis. I do think it’s important that if you’ve had a relationship with a business banking manager - you approach them for options and compare them with a great commercial finance broker who specialises in property lending (different to commercial equipment finance)

THIRD. WHAT

• For the purposes of this exercise, we’ll assume you’re looking at commercial property from an investment perspective (rather than to occupy and run your business from).

• Understand what you’d like to achieve based on your long-term goals. How much deposit do you have access to? Is there a particular asset class you’re drawn to:

  • Industrial / Warehouse

  • Retail

  • Offices

  • Agricultural

  • Special Purpose

• What are the growth areas both geographically and for the demand of different asset classes? This is where a buyer’s advocate can help you locate the long-term growth areas, low vacancy rates, long term demand for asset classes based on population growth and infrastructure spending (to name a few variables).

Great work - now that you’ve started with the basics, have a look at our post about different commercial asset types and an overview of how each one is defined.