The Time Factor in Commercial Contracts that Help You Make Money

  Use your time wisely I took a call from an old friend last night. She was asking me for some advice about a property that she wanted to buy. It was a small, old run-down house (I know right! The cheek of calling me and asking me about residential) that was going to auction at the end of the week. Small… old… ugly… with bonus asbestos. Not ideal – but it was cheap, so it had that going for it. She told me about …

Testing Your Resolve: Dealing With Commercial Agents

Estate agents are a different breed… I know, I used to be one. (I’ve still got my licence – but I don’t use it.) This is especially true of commercial agents. You’d think that if you were selling a property for someone… and of course trying to sell it TO someone, you’d make every effort to service enquiries that come in about properties you have in your books. After all when you sell a property as an agent – you make money. That’s how it …

What Happens When A Tenant Leaves

Commercial leases are typically 3 years… that’s the average. They usually have an option… say: a 3+3+3 lease. That means that after the first 3 years the tenant has the option of renewing two more times. Simple enough. It’s not uncommon for tenants to take all 3 options and even renegotiate the lease at the end of that period as well. If a business is going well it usually makes sense for them to stay put where customers know where to find them. But… As …

It’s not about floor space – it’s about opportunity

I’ve noticed a trend in (esp) capital cities… Not just here in Australia but all around the world. Now I’m finally taking a leaf out of this playbook and looking and putting it into action. What am I talking about? Tiny shops. There’s a movement to making shop spaces much smaller. I first really sat up and paid attention to this a couple of years ago when I was in Sydney looking at the Crumpler bag store. It’s not a big store, and the main …

A Crash Course In Honest Numbers

  Getting Honest with yourself about the numbers Over the weekend one of my relatives asked me to take a look at a couple of properties she was interested in buying. They were both commercial, which is why she had come to me. This wasn’t her first rodeo when it came to investing in property. I think she has a flat somewhere – but it was her first commercial. For that reason, she’d already done some research and due diligence. 1- She’d travelled to the …

Why buying remotely is stupid – It pays to go look at it.

I’ve seen quite a few deals where people have bought commercial properties based on the numbers and images from the agent. While, as you know I’m all about the numbers… My basic rule of thumb is the numbers have to work… Never buy based on gut instinct or anything like that. But here’s the deal. If the numbers work… you still should go an inspect the property. Over the last few months, I’ve been looking for a shopping centre to buy. I’ve made an effort …

The 6 core investment objectives for Commercial Property

If you’ve read a few of my emails you’ll know that I’m all about the cash flow… Or so it seems. It’s easy to talk about the cash flow because it leads to what I call the cash flow lifestyle… That’s where I tell you about how I go surfing every morning and lead a pretty chilled life. It’s easy to talk about that stuff because that’s the sexy side of commercial investing… …but it’s not the only thing I look for. It’s one of …

Getting the best price for your commercial property at sale time

For me, commercial is a buy and hold investment. I want good solid properties with little or no maintenance issues… and most importantly, strong leases, good cash flow and happy tenants with stable, successful businesses. When I get properties that like I tuck them away and keep them for the long term. Honestly, why would you ever get rid of a property like that? Having said that… of course, there are times when you’ll want to sell. Maybe it’s underperforming. Maybe there are better opportunities …

How to protect yourself against market fluctuations

It’s funny; I got an email today from someone telling me that they thought that it was not a good time to buy commercial property. They claimed that cap rates are too low to make a profit and the market is too unstable. That interest rates were about to rise, and we are all due for another recession. They also quoted some newspaper talking about how Amazon is coming to Australia, and it was going to kill the retail market in Australia. I dealt with …

Interest Rate Tipping Point How commercial and Residential Compare

The pattern for someone investing in property is that they get told by their accountant to buy negatively geared property to offset their tax. All good – they find a home they can afford, get some renters in and enjoy getting a little of their tax. After a while, the value of the property goes up a bit, and their accountant tells them to refinance and do it again… That’s when the trouble starts. They get the idea that more is better and they want …